Marketing No Comments

Mortgage lenders prepare to launch new low deposit mortgages

Mortgage lenders in the UK are preparing to launch a wave of ultralow deposit deals on to the market.

Several big high street names have already confirmed their intention to participate in a new UK government-backed five per cent deposit scheme, which was unveiled by the Chancellor in the recent Budget.

Lenders who are participating in the new scheme include Lloyds, Natwest, Santander, Barclays, HSBC UK and Virgin Money.

Some lenders are expected to reveal further details about what they will have to offer in the coming days, The Scotsman reports.

The new mortgage guarantee scheme aims to increase the appetite of lenders across the UK for high loan-to-value lending (LTV) to creditworthy customers.

To find out more about how we can assist you with your Mortgage requirements, please click here to get in touch

It will be available to current homeowners as well as first-time buyers looking for a property for up to £600,000. Borrowers will still need to pass the usual affordability checks.

On the whole, the scheme can be used for new or existing properties and it will be open for applications from later this month until December 31 next year.

The initiative will work by allowing lenders to purchase a Government guarantee that would compensate them for a portion of their losses in the event of foreclosure.

The new scheme will mirror a “tried and tested” initiative which reinvigorated the mortgage market in the recent past.

In 2013, the government launched the Help to Buy mortgage guarantee scheme in response to a similar shortage of low-deposit mortgages following the 2008 financial crisis. The programme helped more than 100,000 households to buy their own home across the UK.

The previous Help to Buy scheme also had the effect of boosting competition in the 5 per cent deposit bracket among lenders who were not part of the scheme.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

They ramped up their low-deposit ranges in order to compete with lenders taking part in the initiative.

Lloyds Banking Group confirmed that its new deals will be available across its brands, Lloyds Bank, Bank of Scotland, and direct from Halifax, as well as through Halifax Intermediaries.

The bank said that two-year and five-year product options will be made available.

A Santander spokeswoman said: “We’re pleased to be supporting the Government’s 95% mortgage guarantee scheme and look forward to sharing full details of the products available shortly.”

A spokesman for Virgin Money said: “We will be an active participant in the Government’s mortgage guarantee scheme and we are due to announce our proposition next month.”

Source: Scottish Construction Now

Discover our Mortgage Broker services.

Marketing No Comments

Bank of England: Mortgage borrowing reaches five-year high in February

Individuals secured an additional £6.2 billion in mortgage borrowing in February which is the strongest level since March 2016, the latest Bank of England (BoE) figures have revealed.

The latest data showed it was not just net borrowing which was buoyant last month, but there were also a high number of approvals.

The 87,700 approvals, although down on the peak of 103,700 in November 2020, were still well above the monthly average in the six months to February 2020, which was 67,300.

The BoE Money and Credit report for February 2021 also reported approvals for remortgages with a different lender increased slightly from 32,600 to 34,300 between January and February.

To find out more about how we can assist you with your Mortgage requirements, please click here to get in touch

When it came to gross borrowing the figure reached £27.7 billion which was very close the March 2016 figure of £27.9 billion.

The BoE data also revealed the ‘effective’ rate – the actual interest rates paid – on newly drawn mortgages increased by six basis points to 1.91% in February.

It said this was slightly higher than the rate in January 2020 (1.85%), and compared with a series low of 1.72% in August 2020. The rate on the outstanding stock of mortgages remained at series low (2.09%).

The BoE thought the strong borrowing figures were caused by the flurry of activity as buyers rushed to meet the original stamp duty holiday deadline of 31 March.

But John Phillips, national operations director, Just Mortgages and Spicerhaart said thought there were other influencing factors at play.

He said: “This is only part of the story. A year on from the start of the first lockdown, what is clear is that the pandemic has spurred people into action.

“Whether it is those looking to move for more outside space. Or the lack of commute meaning some are choosing to leave the city, in a year where our lives were turned upside down, priorities were shaken up.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

“With the extension to the stamp duty holiday, the reintroduction of 95% LTV mortgages and the furlough scheme running till September, the property market should keep moving at a pace and we may see records broken for the first quarter of 2021.”

Meanwhile Jonathan Sealey, CEO of specialist short term lender Hope Capital, said the figures were also testament to the hard work of everyone involved with the property and mortgage industry.

“All those involved in the sector should take credit for that, and initiatives such as virtual viewings and the introduction of new products during the lockdown, have contributed to the property market staying operational,” he said.

“It’s also been an opportunity for specialist lenders particularly who have been able demonstrate the agility and speed that sets them apart from high street lenders, in ensuring people can get their deals over the line, no matter what else is happening.”

By Kate Saines

Source: Mortgage Finance Gazette

Discover our Mortgage Broker services.

Marketing No Comments

More Mortgages Agreed by Lenders in Early 2021

Mortgage commitments agreed by lenders were a quarter more at the end of 2020 than at the end of 2019, the private investor platform Hargreaves Lansdown has highlighted.

Advances actually paid in the fourth quarter of 2020) were also up on the same quarter a year earlier, but this time by only 4.2 per cent. In the year as a whole they were unsurprisingly down by 9.8 per cent.

The value of balances in arrears rose by 3.4 per cent in the last quarter and is now just under 1 per cent of all mortgage balances.

To find out more about how we can assist you with your Mortgage requirements, please click here to get in touch

‘The race for space has turned out to be more of a marathon than a sprint’, said Hargreaves Lansdown personal finance analyst Sarah Coles.

‘We’ve been snapping up mortgages at the fastest rate since the onset of the financial crisis – and that was even before we knew the stamp duty holiday would be extended.

‘The mortgage market was booming at the end of last year, and the mortgages being agreed for the start of 2021 were at their highest for 14 years’.

Discover our Residential Mortgage Broker services.

Meanwhile, arrears are starting to grow, said Coles. But ‘let’s not get ahead of ourselves, arrears are still incredibly low: right now they’re at 0.93 per cent compared to 3.64 per cent in early 2009. However, during the pandemic millions of borrowers have been able to rely on payment holidays, so have been able to avoid paying without running up arrears. Now that support is winding down, anyone who’s still struggling is running out of road. When the FCA asked people in October, 19.6m expected to be struggling to pay the bills or service their debts by April. By the time we get the March figures, arrears could look much worse’.

Source: Landlord Knowledge

Discover our Mortgage Broker services.

Marketing No Comments

Value of new mortgage commitments reach highest level since 2007

The value of new mortgage commitments was up 24.2% annually to reach £87.7bn, and is at the highest level since 2007 according to the Financial Conduct Authority (FCA).

The quarterly mortgage lending statistics data also shows that the outstanding value of all residential mortgage loans was £1,541.4bn at the end of Q4 2020, 2.9% higher than a year earlier.

The value of gross mortgage advances in Q4 2020 was £76.6bn, 4.2% higher than in Q4 2019.

To find out more about how we can assist you with your Mortgage requirements, please click here to get in touch

Since the beginning of 2007, am estimated 340 regulated mortgage lenders and administrators have been required to submit a Mortgage Lending and Administration Return (MLAR) each quarter, providing data on their mortgage lending activities.

The FCA and the Prudential Regulatory Authority (PRA) both have responsibility for the regulation of mortgage lenders and administrators so this data publication is joint.

Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said: “The highest volume of mortgage commitments since 2007 has been fuelled by the stamp duty holiday.

Discover our Residential Mortgage Broker services.

“It not only means that brokers will have a very healthy pipeline of business throughout the start of this year but also there is plenty of momentum in the market.

“The stamp duty holiday extension until the end of June should help to maintain high volumes but brokers need to be mindful of the time it takes for offers to complete. New buyers or movers need to have contingency plans in case they miss the June deadline and are faced with a tax bill.

“The huge numbers in Q4 have been fuelled mainly by movers and first time buyers but there is still a large market out there for remortgage business.”

By Jake Carter

Source: Mortgage Introducer

Discover our Mortgage Broker services.

Marketing No Comments

Details of new 5% deposit mortgage scheme to be outlined in Budget

Ultra-low deposit mortgages are set to make a comeback with a new 5% deposit home loan guarantee scheme.

Details about the new scheme are expected to be set out in Chancellor Rishi Sunak’s Budget on Wednesday.

The scheme will be available to current homeowners as well as first-time buyers looking to buy a house for up to £600,000.

The initiative will be available to lenders from April and is designed to increase the appetite of mortgage lenders to offer high loan-to-value lending to creditworthy customers across the UK.

Under the scheme the Government will offer to take on some of the risk of low deposit loans, meaning lenders would have some protection from potential losses.

To find out more about how we can assist you with your Mortgage requirements, please click here to get in touch

Low deposit loans are often seen as more of a risk because borrowers could end up in negative equity if house prices fall – meaning they owe more than their property is worth.

Lenders will be able to purchase a Government guarantee that compensates them for a portion of their losses in the event of foreclosure.

All lenders under the scheme will offer mortgages fixed for at least five years as part of their range of products, providing options for consumers with smaller deposits who want the security and predictability of a mortgage with a fixed rate over a longer term.

The new initiative follows in the footsteps of the UK-wide Help to Buy mortgage guarantee scheme, which was launched in 2013 and helped to reinvigorate the market after the 2008 financial crisis.

That scheme, which also offered 5% deposit mortgages, is no longer running.

It helped more than 100,000 households across the UK to buy a home, but it also drew accusations of pumping up property prices.

Many low deposit mortgages vanished from the market last year amid concerns about the wider economy.

However, more recently, lenders have been bringing back low deposit deals, clustered around the 10% deposit level.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

For example, Yorkshire Building Society launched two new 10% mortgages on Wednesday exclusively for first-time buyers.

In recent months, house prices have jumped to record highs, fuelled by buyers wanting to move to make lifestyle changes, as well as a temporary stamp duty holiday.

The stamp duty holiday is due to end on March 31, but it could be extended by another three months in the Budget, according to recent reports.

Rightmove estimates that 100,000 buyers who agreed a purchase last year are set to lose out if the deadline remains at March 31.

In total, it estimates an additional 300,000 property transactions in England could get through if the deadline is extended to June, saving buyers £1.75 billion in total.

Rightmove’s property expert Tim Bannister said: “We estimate that around 100,000 sales will miss the current March deadline, and so if the holiday is extended to the end of June it would give these the chance to complete in time, plus a number of other sales could now make it through that were only agreed at the start of this year.”

Kate Eales, head of regional residential agency at Strutt & Parker, said a possible extension “is likely to motivate potential buyers who thought about entering the market but might have been put off by lockdown restrictions and felt they had already missed the boat with this holiday altogether”.

She added: “An extension, combined with the recent Government road map to normality, is likely to work together to encourage more to come to the market and take advantage of the holiday.”

Prime Minister Boris Johnson said previously: “I want generation rent to become generation buy and these 95% mortgage guarantees help to deliver this promise.

“Young people shouldn’t feel excluded from the chance of owning their own home and now it will be easier than ever to get on to the property ladder.”

Mr Sunak said previously: “By giving lenders the option of a Government guarantee on 95% mortgages, many more products will become available, helping people to achieve their dream and get on the housing ladder.”

Source: Express and Star

Discover our Mortgage Broker services.

Marketing No Comments

Mortgage borrowing remains high in January – Bank of England

Net mortgage borrowing remained at £5.2bn in January, according to the Bank of England’s Money and Credit statistics for January 2021.

This is up from the monthly average of £4bn in the six months to February 2020.

The statistics also show that there were 99,000 mortgage approvals for house purchase in January, in line with the average of 100,000 since October 2020.

In addition, effective interest rates on new mortgage borrowing fell to 1.85% in the first month of the year.

That is in line with the rate in January 2020, and compares with a series low of 1.72% in August 2020.

The rate on the outstanding stock of mortgages fell to 2.09% which is a new series low.

David Whittaker, chief executive of Keystone Property Finance, said: “Today’s statistics show that the housing market remained resilient as the New Year kicked off, with demand for property continuing to rise as people take advantage of low interest rates and the stamp duty holiday.

“However, it’s clear that mortgage transactions are beginning to slow as the impact of the third national lockdown on consumer confidence and uncertainty about the future of the stamp duty holiday takes hold.

To find out more about how we can assist you with your Mortgage requirements, please click here to get in touch

“In addition, while demand for property has remained strong, data shows that the supply of new property has decreased since the beginning of the year.

“As well as navigating this unprecedented market, buy-to-let borrowers have an added challenge of dealing with recent and upcoming regulatory changes.

“As such, the value of advice for landlords cannot be understated.

“The role of mortgage brokers has never been more important in helping landlords understand this shifting landscape and find the right mortgage for them and their individual circumstances.”

Joshua Elash, director of property lender MT Finance, added: “There is an astounding level of liquidity in the market at a time when the economy itself is in a state of partial paralysis. It is unusual and feels dysfunctional.

“Consumer borrowing is down, as lockdown continues to bite into people’s ability to go out, shop, and enjoy the things in life we usually take for granted.

“This new reality has meant that households continue to deposit savings at remarkable levels, given that interest rates are at historically low levels.

“Net mortgage borrowing is also robust, encouraged by the stamp duty holiday and effective interest rates as low as 1.85%.

“With the Chancellor rumoured to be rolling out a mortgage guarantee scheme, which will see the return of higher loan-to-value deals, this trend will continue, leading to serious inflation in property prices.”

Islay Robinson, group chief executive of Enness Global Mortgages, said: “These latest mortgage approval numbers highlight a market at its most buoyant in the month of January since before the financial crisis of thirteen years ago.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

“Activity is far higher than normal levels and this has no doubt been driven by the current stamp duty holiday.

“Homebuyers are shrugging off any fears of a pandemic property decline in their rush to secure a stamp duty free purchase.

“This frenzy looks likely to continue until summer, given Rishi Sunak’s potential pending announcement of an extension via Wednesday’s budget.

“The question for sellers, estate agents and mortgage brokers is, ‘what happens once the levy is reinstated?’

“We may be about to take a step back from the cliff-edge should the stamp duty holiday be extended.

“However, this is only prolonging the inevitable and, if anything, will only steepen the gradient of any potential market decline.

“We should perhaps make the best of these ‘sunny days’ whilst we can before another stamp duty deadline countdown leaves us teetering on the edge once again.”

Iain McKenzie, chief executive of the guild of property professionals, added: “Despite January traditionally being a slower month for purchasing a home, these figures show the stampede to buy property before the stamp duty holiday ends.

“It is good news for the wider economy that there is still interest in moving up the property ladder and consumer confidence in mortgages is still robust.

“Consumers are also repaying debts at an incredible rate, which can be partly ascribed to the savings that many employees are making by working from home.

“However, this could also indicate a lack of confidence in how the economy will fare this year, as people are choosing to pay down debts rather than spending the extra cash.

“Interest rates on mortgages are some of the lowest we’ve seen in a long time, and this could be another strong year for the housing market.”

By Jake Carter

Source: Mortgage Introducer

Discover our Mortgage Broker services.

Marketing No Comments

Mortgage options hit highest level since first national lockdown

With lenders continuing to gain confidence, homebuyers and investors seeking mortgages now have the highest level of mortgage options available since March 2020.

Lenders recently launched a range of new mortgage options for property buyers. Currently, there are 3,215 mortgage deals available, according to Moneyfacts. This is the highest number in 11 months, when there was 5,222 deals available on the market.

In the first half of 2020, mortgage options fell sharply. Many lenders withdrew mortgages while they reassessed the level of risk they could take in the wake of the COVID-19 pandemic. In particular, borrowers with smaller deposits had few mortgage deals available.

During the second half of 2020, the mortgage market started recovering. Since October, the number of mortgage options has grown by 42%. This is the biggest four-monthly increase since 2007 .

To find out more about how we can assist you with your Mortgage requirements, please click here to get in touch

Additionally, at the end of 2020, mortgage approvals were at the highest level since 2007. The housing market remained busy as homebuyers and property investors have been rushing to beat the stamp duty holiday deadline.

Mortgages with smaller deposits available

Choice in mortgages is particularly increasing for borrowers with smaller deposits. In the past few months, the most significant rise was for 90% loan-to-value (LTV) mortgages. This LTV mortgage where borrowers only need to put down a 10% deposit is typically used by more first-time buyers.

Eleanor Williams from Moneyfacts says: “Those with 10% deposit or equity might be especially pleased to note that this tier has, for a second month, seen the largest uplift in availability.

“With products at this level often favoured by first-time buyers and traditionally being seen as higher risk for providers, willingness to extend lending in this risk bracket could be an indication that lenders have confidence in the sector, despite ongoing, wider economic uncertainty. This is echoed by the average two and five year fixed rates at 90% LTV seeing the largest fall of all the lending tiers, reducing by 0.09% and 0.07%.”

Mortgage interest rates stabilising

Average interest rates have increased across all LTVs. However, the average rate has increased only fractionally, which shows rates are stabilising. This is likely due to increased competition in the mortgage market. It also shows lenders are gaining more confidence and less risk averse than before.

Eleanor Williams comments: “At 2.53%, the two year fixed overall average rate is now 0.11% higher year-on-year, while the five-year equivalent at 2.73% is equal to where it sat in February 2020.

“Therefore, while these rates have risen again, the increases are of just 0.01% and 0.02% this month, which may be a sign of the start of some stability in the market, especially when compared to the drastic monthly increases witnessed over the course of last year.”

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Choosing the best deals

Moneyfacts advises borrowers to take into account a number of factors when choosing a mortgage deal. Don’t look at just the interest rate. It’s important to also take product fees and incentives into consideration.

Recently, two-year fixed products have been particularly popular. Two-year fixed deals typically have lower interest rates than five-year fixed deals. However, for some, the five-year option could be a better choice in the long run. And the interest rate gap between two and five-year fixed rates mortgages has dropped to its lowest level since 2013, according to Moneyfacts.

As the economy and mortgage market remains uncertain, five-year fixed deals could provide longer-term stability. However, this depends on the borrower’s needs. Seek independent financial guidance to find the best mortgage deal for your circumstances.

By Kaylene Isherwood

Source: Buy Association

Discover our Mortgage Broker services.

Marketing No Comments

Mortgage Lenders Show Confidence, A Research By MoneyFacts Has Found

There are now more mortgage deals available than since the start of the Coronavirus pandemic began impacting the UK economy last March, MoneyFacts has reported.

Its latest UK Mortgage Trends Treasury Report, found that there are currently 3,215 mortgage deals available, the highest number yet since March. Then there were 5,222 deals in the market.

The biggest rise in deals over the last few months is in 90 per cent loan to value deals.

To find out more about how we can assist you with your Mortgage requirements, please click here to get in touch

While average mortgage interest rates have risen across all LTVs, the average for two and five year 90 per cent LTV fixed mortgages fell month-on-month from 3.65 per cent and 3.79 per cent in January to 3.56 per cent and 3.72 per cent in February respectively.

‘Those with 10 per cent deposit or equity might be especially pleased to note that this tier has, for a second month, seen the largest uplift in availability. With products at this level often favoured by first-time buyers and traditionally being seen as higher risk for providers, willingness to extend lending in this risk bracket could be an indication that mortgage lenders have confidence in the sector, despite ongoing, wider economic uncertainty’, said Moneyfacts’ Eleanor Williams.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

‘This is echoed by the average two and five year fixed rates at 90 per cent LTV seeing the largest fall of all the lending tiers, reducing by 0.09 per cent and 0.07 per cent’.

Source: Landlord Knowledge

Discover our Mortgage Broker services.

Marketing No Comments

UK mortgage approvals reach highest level since 2007

The number of mortgage approvals reached their highest level since 2007 last year as buyers took advantage of the stamp duty holiday.

The housing market remained resilient in the face of volatility and essential closure of the market during the first lockdown.

There were 818,500 mortgage approvals over 2020, up from 789,100 the previous year, according to Bank of England data released today.

To find out more about how we can assist you with your Mortgage requirements, please click here to get in touch

There was a significant uptick in lending in the second half of the year after a record low of 9,400 approvals in May. Borrowers rushed to take advantage of the stamp duty holiday introduced over the summer.

Although approvals fell back to 103,400 in December, down from 105,300 in November, it was still the highest level since August 2007.

Former RICS residential chairman Jeremy Leaf is not complacent: “While these figures are always a good indicator of direction of travel for the market, we won’t be getting carried away, not least because the year’s lower for these approvals appeared a couple of months after the first lockdown.”

Discover our Residential Mortgage Broker services.

Additionally this level of momentum is unlikely to be sustained as the stamp duty holiday winds down at the end of next month.

Samuel Tombs, Pantheon’s chief UK economist predicts the vaccine rollout will also mean “people will be content again with their pre-pandemic housing choices by the summer.”

The BoE’s data also showed that consumers paid down a record £16.6bn in debt last year as spending options became limited during lockdown.

“An overall reduction in consumer debt, combined with high levels of cash savings, and pent up demand for holidays, meals out and other leisure activities, could prove to be an explosive powder keg that will help drive the economy when it finally opens up again,” AJ Bell financial analyst Laith Khalaf says.

By Angharad Carrick

Source: City AM

Discover our Mortgage Broker services.

Marketing No Comments

Mortgage approvals jump to four-year high in December

Mortgage approvals surged in December to a four-year high, data published on Monday showed.

According to UK Finance, the banking lobby group, house purchase mortgage approvals by the main high street lenders rose to 46,815 in December from 44,058 in November, the highest number since August 2015. Analysts had been expecting the figures to remain largely flat, at around 44,000.

Gross mortgage lending across the residential market was £22.2bn in December, bringing the total for 2019 to £265.8bn, 1.1% lower than 2018’s figure. A total of 982,286 mortgages were approved, a 7.4% increase on the previous year.

To find out more about how we can assist you with your Mortgage requirements, please click here to get in touch

Howard Archer, chief economic advisor to the EY ITEM Club, said mortgage approvals would have been “significantly lifted by increased confidence and reduced uncertainties” following December’s general election.

He continued: “Prior to November, mortgage approvals for house purchases had fallen back for three successive months to be at a seven-month in October, indicating that activity was being pressurised by heightened uncertainties over the domestic political situation and Brexit.

“Housing market activity, and possibly to a lesser extent prices, could be given a modest lift in 2020 if the government introduces specific measures aimed at boosting the sector in the Budget. Furthermore, mortgage interest rates are at historically low levels; indeed there is clearly a real possibility that the Bank of England could cut interest rates in 2020.

Discover our Residential Mortgage Broker services.

“However, the economy still looks set for a pretty challenging 2020, so the upside for house prices is likely to be limited. Furthermore, Brexit concerns could very well pick up again as 2020 progresses, due to concerns over what will happen at the at the end of the year if the UK and European Union have failed to reach agreement on their long-term relationship.”

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “The jump in mortgage approvals in December likely solely reflects the stimulus provided by the sharp fall in mortgage rates in the second half of last year; the additional boost to approvals from the result of the general election is still to come. All the evidence so far points to a further rise in demand after the election. The new buyer enquiries balance of the RICS Residential Market Survey leaped in December to its highest level since January 2019.”

UK Finance also said that credit card spending rose 7.3% year-on-year to £11.8bn in December, with repayments continuing to offset spending, meaning the overall level of borrowing through cards grew at a slower rate of 2.4% annually.

Personal borrowing through loans was 14% higher year-on-year, while overdraft borrowing eased 0.8%.

Previously the British Bankers Association, UK Finance represents more than 250 firms.

By Abigail Townsend

Source: ShareCast

Discover our Mortgage Broker services.