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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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Mortgage Market Review Already Causing Delays For Borrowers

Mortgage Market Review Already Causing Delays For Borrowers

Mortgage Market Review Already Causing Delays For Borrowers

Would be residential property buyers are dismayed about the change of the rules on residential mortgages, with strict lending criteria tightened following the introduction of the Mortgage Market Review (MMR).

Since 26th April 2014, mortgage lenders have been required to carry out much more detailed checks of a borrower’s financial situation to be sure that they can truly afford to purchase and continue to afford the property, both now and in the future.

The introduction of the MMR is supposed to help regulate the residential property purchase market and does not yet apply to buy to let mortgages, but that could happen in time.

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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!

2nd Consecutive monthly fall in residential property mortgage approvals

2nd Consecutive fall in residential property mortgage approvals

Mortgage approvals for UK residential property

purchases dropped in February

The Bank of England (BoE) has confirmed that residential mortgage lending fell for a second successive month in February 2013 reinforcing previously released data from the Council of Mortgage Lenders (CML) and the British Bankers Association (BBA).

The Bank of England figures show that 51,653 residential property mortgages were approved in February, the lowest number since September 2012.

The overall figure was down on the Bank’s revised figure of 54,187 mortgage approvals expected for January, and the amount of mortgage approvals for the purchase of residential properties were less than was originally predicted for February.

Economists had forecast a fall in mortgage approvals, down to 53,700, according to a panel of estimates by Bloomberg. However, the Bank of England have said that remortgage lending in February had increased by 3.8% to 26,771.

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 Mortgage Approvals Fall As Demand From

Residential PropertyBuyers Fades

UK Mortgage Approvals Fall

UK Mortgage Approvals Fall

UK mortgage approvals in February 2013 have fallen to the lowest level seen for seven months according to E.surv chartered surveyors.

E.surv, reckon that only the government Funding for Lending (FLS) scheme is preventing a much steeper fall in residential property mortgage lending for purchasing, even though uptake from potential property buyers has been lower than expected.

Overall UK mortgage approvals fell by 11% in February to just 49,019,  down from 54,719 approvals recorded in January 2013, making it the lowest mortgage approval level since July 2012, according to E.surv data.

The fall in mortgage approvals comes despite a wider and cheaper range of residential mortgage products on offer, which suggests that the drop in mortgage lending was due to weakening borrower demand and not a decline in the availability of residential mortgages.

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The Financial Services Authority (FSA), are urging people seeking mortgage advice to ensure they obtain the correct type of mortgage product for their residential property purchase.

The FSA have said that Buy to Let Mortgage applications are rising, but a growing number of applications are fraudulent.

Would be homeowners and borrowers who, for whatever reason are unable to meet the strict lending criteria now demanded for a UK residential mortgage, are attempting to fraudulently use Buy To Let (BTL) mortgages as a means to purchase property, despite having no intention of being a landlord or ever renting the property out to tenants.

Buy to let mortgages are not regulated in the same way as residential mortgages and the borrowing criteria are more relaxed.

This means that buyers who fail to meet the income and credit check requirements of a residential mortgage can still get approval for a similar sized buy to let mortgage.

The FSA believe that intermediaries and financial advisors are involved in the fraudulent applications.

When asked about the rising levels of deception an FSA spokesman commented: “We are seeing anecdotal evidence of unregulated buy-to-let mortgages being used fraudulently as a replacement for regulated residential mortgage contracts, as borrowers and intermediaries seek to circumvent more stringent income and affordability checks.”

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