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Demand For High Risk Mortgages Reaches New High

Demand For High Risk Mortgages Reaches New High

More property buyers with small deposits are taking out high risk loans worth over 3.5 times their take home income

The number of residential property buyers who can only raise a small deposit of less than 10%, and who don’t qualify for the Government’s Help To Buy scheme, are taking out high risk loans worth over 3.5 times their take home income, has risen to its highest level for over five years.

New figures published by the Bank of England (BoE) show that the number of high risk mortgages being taken out by property investors and existing landlords has increased in the first three months of 2014.

Mortgage lending to new borrowers who had less than a 10% deposit and a Loan-To-Income (LTI) multiple of more than 3.5 times a single person income, or 2.75 times for joint income borrowers, has increased to 2.6%, the highest recorded figure since the last quarter of 2008.

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CML Say Help To Buy Is Not Creating Another Property Bubble

CML Say Help To Buy Is Not Creating Another Property Bubble

Help To Buy Only Accounts For 4% Of Annual Mortgage Approvals 

New analysis of the UK residential mortgage market by the Council of Mortgage Lenders (CML) has revealed that the impact of the government’s Help To Buy scheme on the UK property market has been fairly limited.

Property pessimists have tried to claim that the Help To Buy initiative is responsible for creating another property bubble, however, official figures show that HTB has had little impact on UK property sales.

The Help To Buy scheme accounts for just 1% of all residential mortgages taken out in the six month period to March 2014.

According figures from the CML, only 4% of all UK mortgage approvals between April 2013 and March 2014 were part of the Help To Buy scheme, but 85% of those taking part in the scheme were first-time buyers.

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Demand May Outstrip Supply As Lenders Brace For Help-To-Buy Stampede

Demand May Outstrip Supply As Lenders Brace For Help-To-Buy Stampede

Demand May Outstrip Supply As Mortgage Lenders Brace For Help-To-Buy Stampede

Over 600,000 residential properties are eligible for the £12 Billion (GBP) scheme, while Zoopla says buyers will still need average £10,000 (GBP) deposit

More than 600,000 residential properties on the market are eligible for inclusion in the £12 Billion (GBP) second phase of the Help-To-Buy scheme, according to the latest in a series of surveys leading to predictions that UK mortgage lenders will be inundated due to the expected demand for the government-backed mortgages.

Details of the 95% mortgages, which are available to existing property owners as well as first-time buyers, are to be unveiled by Chancellor of the Exchequer, George Osborne, with some banks expected to invite loan applications within hours of the announcement expected next week.

The second phase of the Government’s flagship scheme to allow more first-time buyers and second steppers, wider access to the UK’s residential property market has already been brought forward by three months, with high street bank Santander claiming that up to 1.7 million people want to use the scheme.

The Help-To-Buy scheme will cover existing residential properties as well as new-build properties, but as yet there are no plans to allow Buy-To-Let property investors use the scheme.

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UK Property Prices Continue To Rise

UK Property Prices Continue To Rise

UK Property Prices Increased By 0.6% In August 2013

The latest House Price Index (HPI) published by UK building society and leading mortgage lender, Nationwide, reveals that UK property prices are continuing to increase at a steady and sustainable pace.

Data from the Nationwide HPI show that UK property prices are now 3.5% higher than they were in 2012 and 0.6% higher than they were in July 2013, making a typical residential property now worth around £170,514 (GBP).

The data also reveals that the annual rate of residential property price growth has slowed, down to 3.5% from the 3.9% observed last month, but economists had allowed for a drop in growth because of only having a low base for comparative purposes.

The quarterly measure of UK property prices has increased by 1.4%, showing that residential property prices are rising at their strongest pace for the last three years, which could promote fears of another property bubble.

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Government Help To Buy Scheme Set To Boost

Property Ownership

40% Of Trapped Tenants Could Become First Time Buyers With Help To Buy Scheme

40% Of Trapped Tenants Could Become First Time Buyers With Help To Buy Scheme

Almost 40% of tenants trying to escape being part of Generation Rent could become homebuyers when the Governments 95% Help to Buy scheme is implemented in January 2014.

New research released by Rightmove found that very few trapped renters, tenants who would like to buy but can’t afford to, are currently saving for a deposit.

39% of tenants feel they will never be able to become property owners unless they strike it rich, which Rightmove reckon could come in the form of the Government’s Help to Buy scheme, which will enable people with only a 5% deposit to get on the housing ladder.

The research, conducted among 3,214 current private rental sector (PRS) tenants, last month, between April 9th and April 25th, shows that while 42% of trapped tenants are trying to save for a deposit, currently less than 10% of tenants are on course to meet their deposit goal , with the majority not in a position to start saving.

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Hype surrounds 2013 Mortgage Figures

Hype surrounds 2013 Mortgage Figures

2013 started with claims that the UK had recorded the best lending on mortgage figures in five years, but these claims by the UK Council of Mortgage Lenders (CML) are being disputed.

According to the CML, a total of 38,300 loans were advanced for residential property purchases in January, the highest for the month since 2008 when 47,800 loans were advanced. The January performance came despite a marked drop from December 2012 when 45,900 mortgage loans were advanced.

Now critics have suggested that the CML’s mortgage figures were pure hype and speculation as mortgage approvals, and not actual monetary advances, were actually down in January this year, and no figures were released for the UK Buy To Let mortgage market for the same time frame.

Mortgage figures for approvals on residential property purchases appeared to be up 11% compared with January 2012 when there were 34,600 mortgage loans approved for residential property purchases and activity by first-time buyers and home movers both increased.

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Mortgage repayments have fallen by more than two-fifths in Scotland when taken as a proportion of income

 

Scotland is best place to get a mortgage

Scotland is best place to get a mortgage

Mortgage payments have fallen from a peak of 38% in last quarter of 2007 to just 22% in the final quarter of 2012, according to research conducted by Bank of Scotland.

Lower residential property prices and reduced mortgage rates have been the main driving force behind the significant improvement in affordability.

The average monthly take-home wage in Scotland is £1,954 (GBP) while the average monthly mortgage payment is just £424 (GBP).

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Landlords Forced Into Remortgaging

Landlords Forced Into Remortgaging

More landlords are remortgaging compared to 12 months ago, with a number being forced by their existing lenders to find alternative funding from elsewhere, although some are also remortgaging voluntarily in order to expand their portfolios.

According to research from specialist buy-to-let broker Mortgages for Business, an increasing number of landlords are remortgaging more complex buy-to-let property.

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Boost For First Time Buyers As Banking Group Announces Lending Target For 2013

Lloyds Pledge To First Time Buyers

Lloyds Pledge To First Time Buyers

Lloyds Banking Group has committed to lend £6.5 Billion (GBP) to First-Time Buyers by the end of 2013 which is expected to help up to 60,000 new borrowers.

In July 2012, the Group committed £5 Billion (GBP) towards helping First Time Buyers (FTB’s) by the end of the year.

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Is Funding For Lending Working For First Time Buyers?

Is Funding For Lending Working For First Time Buyers?

FIRST-TIME buyer numbers are up by almost a quarter year-on-year, lenders said yesterday, amid signs that government efforts to encourage mortgage lending are finally percolating down to people with smaller deposits.

A total of 21,700 loans worth £2.7 Billion (GBP) were made available to first-time buyers in November 2012, one of the highest monthly totals in the last three years, the Council of Mortgage Lenders (CML) said.

These figures mean that first-time buyer numbers were up by 24% compared with a year earlier, and increased by 8% month on month.

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