UK housing market more stable says Council of Mortgage Lenders
C2013 is expected to be a more stable and positive year for the UK housing and mortgage markets, the Council of Mortgage Lenders (CML) has said.
The CML have said a steady increase in lending for house purchases has signalled more activity in the UK […]
UK housing market more stable
says Council of Mortgage Lenders
Council of Mortgage Lenders Expect 2013 to be Positive for UK Property Market
C2013 is expected to be a more stable and positive year for the UK housing and mortgage markets, the Council of Mortgage Lenders (CML) has said.
The CML have said a steady increase in lending for house purchases has signalled more activity in the UK property market.
However, first-time buyers are still required to provide a substantial deposit averaging 20% of the property value, in order to get a foot on the property ladder.
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The Prime Minister David Cameron insists that the coalition Government’s plans to take a more pro-active role in the UK housing market is “absolutely right” in order to help struggling potential buyers to raise large deposits.
Speaking at a residential property construction site in Lewisham, Mr Cameron attempted to reassure people seeking
The Prime Minister David Cameron insists that the coalition Government’s plans to take a more pro-active role in the UK housing market is “absolutely right” in order to help struggling potential buyers to raise large deposits.
Speaking at a residential property construction site in Lewisham, Mr Cameron attempted to reassure people seeking mortgage advice, stating that the NewBuy Guarantee initiative will help “unblock” the housing market by providing 95% Loan-To-Value mortgages underwritten by homebuilders and the UK Government.
Three major mortgage providers have so far committed to the Government-backed NewBuy scheme.
Barclays, Nationwide Building Society and NatWest Home Loans intend to back the NewBuy scheme by offering products which will tie in with it. Santander and Halifax are also expected to begin offering similar mortgage products along the same lines at a later date.
The mortgage indemnity initiative will aim to help people invest in property even if they only have a deposit of 5% or 10%.
As well as helping people who are finding it tough to save towards 20% deposits, the project is designed to boost the construction sector by spurring demand for new-build properties.
First Time Buyers (FTB) looking to purchase homes in England worth up to £500,000 could be eligible for the scheme in the months to come. The Government will cover 5.5% of the value of each mortgage provided, while 3.5% will be covered by house builders.
Forecasts suggest that as many as 100,000 UK new build home buyers could gain mortgage funding through the scheme.
Mr Cameron said: “The problem today is we have lenders who are not lending so builders cannot build so the buyers cannot buy and it needs the government to step in and help unblock the market. The new scheme was absolutely right in attempting to lower the requirements to more affordable levels of between “£10,000 to £15,000” with the taxpayer and the construction industry underwriting the high loan-to-value (LTV) mortgages”.
However, as reported on “Spotlight” earlier this week, the scheme has already prompted heavy criticism from opposition parties.Read the full article here
Labour’s shadow housing minister Jack Dromey was among the first to be openly critical of the mortgage indemnity scheme proposal, publicly stating that the Government needed to invest directly in the building of more new homes.
Some property industry pundits have labelled the scheme as a “gimmick” to boost the ailing UK construction sector.
Even some lenders remain fairly wary of the Government’s plans and are yet to sign up to the initiative, with only three major lenders signed up to take part so far.
Nonetheless, the Council of Mortgage Lenders has backed the scheme as “good news for home-buyers”.
Intrusive measures are being employed by banks in a bid to penalise personal financial extravagance!
Applicants with families, who buy expensive birthday and Christmas presents or take luxury foreign holidays could now face being turned down for a mortgage following the introduction of intrusive new guidelines.
The new rules from Spanish bank – Santander, one […]
Intrusive measures are being employed by banks in a bid to penalise personal financial extravagance!
Applicants with families, who buy expensive birthday and Christmas presents or take luxury foreign holidays could now face being turned down for a mortgage following the introduction of intrusive new guidelines.
The new rules from Spanish bank – Santander, one of the biggest banks in the world and the UK’s second largest lender of mortgages, will penalise any applicant it deems to be financially extravagant.
Santander may be the first to introduce the intrusive guidelines, but some experts fear other banks and building societies will soon be following suit. The UK’s biggest mortgage lender, Lloyds Group, (inc Halifax and Bank of Scotland), have already imposed similar sanctions on interest-only mortgages.
Spokesman for Priced Out campaign group for affordable homes, Matt Griffith said: “This is ridiculous – no one fails to repay their home loan because they buy gifts for their grandma. Banks are constricting lending to first-time buyers while concentrating on the richer pickings of equity-rich homeowners and investors. As banks scrabble to preserve cash, it seems like we are on the verge of another mortgage crunch.”
The Spanish bank’s questions on occasional spending are far in excess of what is officially deemed fit by the Financial Services Authority, (FSA), after it concluded that only regular spending on essentials and bills needed to be taken into account following the uproar over its original proposal to analyse every aspect of household spending.
Santander’s decision will put a further squeeze on mortgage lending at a time when obtaining a mortgage is already difficult for many.
New mortgage applicants must reveal:
• Salary: 3 months of pay slips or 3 years accounts for the self employed
• Regular Spending: Based on 3 months bank statements including clothing, school fees and energy bills.
• Benefits: Tax credits, pension or maintenance payments
• Credit Record: Detailing if bills are paid on time and going back up to 6 years. Banks also use this to check for truthful submissions.
• Family: Borrowers with children or other dependants will be deemed to have a higher than average monthly expenditure
Santander also check
• One Off Spending: Checks on spending for birthdays, holidays, outings and Christmas presents.
The Spanish bank has already taken steps to slash cheap mortgage deals by telling those who want an interest-only mortgage to come up with 50% of the property’s purchase price.
The bank has issued its brokers with new forms requesting that applicant homebuyers detail all regular expenditure such as bills, school fees, transport, entertainment and clothing.
It also asks for non-regular expenditure, which it specifically sets out as subscriptions, holidays, miscellaneous goods and services, religious festivals and birthdays, to be detailed in a separate column.
Prospective property buyers are not allowed to enter a zero, as this will see their application rejected. The previous application process didn’t ask for any such details.
Santander claims it has been making checks on ‘one-off spending’ for several years. However, experts say the announcement about making more onerous checks was only made last week.
A Santander spokesman said: “The changes will enable us to collect more information upfront about borrowers’ monthly expenditure. This will also make it easier for people to provide all of this information when submitting cases to us”.
A spokesman for the Council of Mortgage Lenders (CML) said: “It’s up to each mortgage lender to decide what information is important from the borrower in order to make a decision on affordability.”
