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Increase In Mortgage Lending Reported By CML

Increase In Mortgage Lending Reported By CML

Property Market Remains Healthy As Gross Mortgage Lending Rise Reported By UK Council Of Mortgage Lenders

There are plenty of media reports suggesting that the UK property market may have stalled and some economists have even gone so far as to predict another property price crash may be on the cards.

However new figures published by the CML show that these statements are far from true as there has been a considerable rise in the value of gross mortgage lending recorded in the UK over the last month.

Figures published by the Council of Mortgage Lenders (CML) highlight a significant rise in mortgage lending volume during October 2014, with gross mortgage borrowing increasing by 5% from September this year to £19 Billion (GBP) making the total gross lending value 8% higher than during October 2013.

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Buy-To-Let Opportunities For Pensioners

Buy-To-Let Opportunities For Pensioners

Buy-To-Let Mortgage Lenders Set To Offer Retiree’s Mortgages

Buy-to-let mortgage lenders are reconsidering their age restrictions following the Government’s announcement to give pensioners unlimited access to their retirement savings.

The move has prompted a specialist mortgage lender to offer pensioners under the age of 70 35-year mortgages, while retired people are being targeted with targeted  by buy-to-let adverts with senior appeal.

Managing Director of The Mortgage Works (TMW), Henry Jordan, said they have recognised that buy-to-let is a popular source of retirement income, stating “The recent budget announcements could see even more pensioners considering buy-to-let as an option for their retirement savings.”

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Mortgage Lenders Worried Help-To-Buy Will Distort UK Property Market

Mortgage Lenders Worried Help-To-Buy Will Distort UK Property Market

Help-To-Buy Controversy Continues

The latest figures released by the popular property finding portal, Rightmove.co.uk coincide with the news that UK based mortgage lenders are worried that the second phase of the Government’s Help-To-Buy scheme risks distorting the true health of the UK property market.

The British Bankers Association (BBA) is a governing body that represents all the banks that are currently participating in the scheme including those who are planning to participate in it in the future, has called for Government clarification on the proposed exit strategy from the Help-To-Buy scheme, according to a report in the Daily Telegraph.The news comes just 2 weeks before the Chancellor of the Exchequer, George Osborne’s Autumn Statement on 5th December.

In a submission to HM Treasury, the BBA said, “Some members of the BBA are participating in the Government’s Help-To-Buy scheme, but further clarification is needed on exit strategies.”

Mortgage applications worth £365 Million (GBP) have been received since the second phase of the Help-To-Buy scheme was launched on 1st October 2013, to help aspiring home buyers get a foot on the property ladder.

The Royal Bank of Scotland, NatWest, Halifax and Bank of Scotland started offering residential mortgages under the umbrella of the Help-To-Buy scheme last month and mortgage lenders representing most of the UK mortgage market have confirmed they will eventually come on board, in order to capture a share of the market.

The Government initiative makes it easier for mainstream mortgage lenders to offer higher value mortgages with deposits as low as 5% by removing some of the risk they would face if the borrower defaults on repayments, because the mortgage products are underwritten by the Government as Spotlight has previously reported.

The Government are very happy to be underwriting Help-To-Buy mortgages because they are listed as a second charge on the mortgage, increasing the Governments property assets, allowing them to borrow money against their portion of the residential properties purchased under the Help-To-Buy scheme.

At least property investors enter the property market with an exit strategy in mind, but the Government have yet to reveal how they intend to exit from the property market when the scheme ends. No wonder mortgage companies are worried!

Property Investors Celebrate Removal Of Income Requirement From Buy-To-Let Mortgages

Property Investors Celebrate Removal Of Income Requirement From Buy-To-Let Mortgages

Buy-To-Let Mortgages On Offer
Based On Rental Income

There is good news for UK based property investors looking for a buy-to-let mortgage as lenders are beginning to understand how landlords make profit from property. Now one lender is taking the lead and offering buy-to-let mortgages based on rental income without worrying about a borrowers personal income.

Mortgage lender, BM Solutions, part of the Lloyds banking group, has removed their minimum £25,000 (GBP) income requirement from all of their buy-to-let mortgages.

Instead, the lender will make a buy-to-let mortgage offer based on the potential rental income expected to be generated by the rental property purchase, rather than being based on a borrower’s employed earnings.

The BM Solutions Buy-To-Let mortgage affordability calculation remains at 125% of the rental income, but the overall lending criteria have been tightened.

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Rental income down valuations affecting

buy-to-let mortgage applications

Buy-To-Let Mortgages Refused As Surveyors Down Value Rental Income

Buy-To-Let Mortgages Refused As Surveyors Down Value Rental Income

Approvals for buy-to-let mortgages are failing because surveyors are ‘down valuing’ the expected rental income from the private rented sector and are advising mortgage lenders accordingly.

In some cases, surveyors are even down valuing the value of rent already being received by landlords.

The claims were made last weekend in a Sunday Times feature, which says that some buy to let mortgage lenders are rejecting landlords’ rental estimates.

Most buy to let mortgage lenders want to see monthly mortgage repayments covered by rent with a 25% excess, to cover expenditure and void periods. Some lenders want to see 130% of rental cover, while others are happy with 100%.

Down valuation of the potential rental income could result in the refusal of the buy to let mortgage application, or lenders may limit the amount they will offer, often below the borrower’s expectations.

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