Marketing No Comments

BoE: Mortgage borrowing rises to £6.6bn in May

Net mortgage borrowing climbed in May to £6.6 billion from £3 billion in April, the latest Bank of England (BoE) data has revealed.

Despite this significant leap, the BoE said borrowing still remained below the record figure of £11.4 billion achieved in March of this year.

Mortgage approvals for house purchases inched up slightly in May to 87,500 from 86,900 in April. This was also lower than the peak of 103,200 in November 2020.

Today’s data also revealed approvals for remortgage – which only captured remortgaging with a different lender – increased slightly to 34,800 in May, from 33,400 in April. This remains low compared to the months running up to February 2020, the BoE said.

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

The ‘effective’ rate – the actual interest rate paid – on newly drawn mortgages went up by two basis points to 1.90% in May.

The BoE said this was marginally above the rate in January 2020 (1.85%), and compared to a series low of 1.72% in August 2020. The rate on the outstanding stock of mortgages remained unchanged at a series low of 2.07%.

Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said: “It’s not surprising that the mortgage market is continuing to perform well, with homebuyers keen to move before the first change to the Stamp Duty holiday at the end of June.

“There’s also a lot of competition amongst lenders, with mortgage rates nearing record lows in some cases – this is of course great news for borrowers”

He added: “We expect figures for June to be even higher, and for activity to return to more normal levels after the threshold for Stamp Duty has been lowered to £250,000.”

Meanwhile, Karen Noye said these figures demonstrated how buyers were ‘soaking up the last of the favourable stamp duty conditions before tapering began’.

“Once the holiday has fully come to an end in October we may enter into a market where buyers choose to wait and see and the number of people looking to buy significantly reduces,” she said.

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

But she warned the end of furlough and other schemes could change the landscape going forward.

“For some time, the housing market has been propped up by government schemes and initiatives like the stamp duty holiday and then 95% mortgage scheme, which has encouraged people to borrow at times where they may have chosen to sit on their hands.

“Once the government’s helping hand has been withdrawn, we may see people opt for a wait and see approach and mortgage borrowing could plummet.

“Similarly, part of the reason the market has been so hot as of recent is due to people wanting to move to properties with gardens or home offices in light of the restrictions on movement and working.

“As things get back to normal this frenzy may start to fade and people feel happier to stay put as cities open back up and outside space is lower on the agenda.”

By Kate Saines

Source: Mortgage Finance Gazette

Discover our Mortgage Broker services.

Marketing No Comments

Lenders hand out most mortgages to first-time buyers in nearly 20 years

Banks and building societies handed out more mortgages to first-time buyers in March than any time since 2002.

Across the UK, 42,330 mortgages were issued to first-time buyers in March, marking the highest monthly total since December 2002 when 44,000 were advanced, according to trade association UK Finance.

Many people who would have taken their first step on the property ladder last year may have put their plans on pause due to the coronavirus pandemic, with the market having been effectively shut for part of 2020.

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

Last peak was in July 2002

A total of 58,810 mortgages were advanced in March to home movers, the highest figure since August 2007. The peak month for home mover activity was July 2004 when 93,500 mortgages were advanced.

The peak month for lending to first-time buyers on UK Finance’s records was July 2002, with 54,100 loans.

March 2021 was the original deadline for a stamp duty holiday in England and Northern Ireland, but the period has been extended.

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

“Since the housing market emerged from its shutdown last spring, we have seen a remarkable recovery in demand, which continued through quarter one 2021,” said Eric Leenders, managing director of personal finance at UK Finance.

“Existing home owners have taken advantage of the stamp duty concessions, with changing working and living patterns encouraging more to use their existing equity, either to move further afield or to fund further housing purchases for themselves or family,” Leenders added.

By Michiel Willems

Source: City AM

Discover our Mortgage Broker services.

Marketing No Comments

Number of Mortgage Deals Increases Between April and May According to New Data

The number of mortgage deals available to consumers increased by 85 between April and May, according to new data from Moneyfacts.

According to the organisation, which has just released its Moneyfacts UK Mortgage Trends Treasury Report, the number of deals available rose from 3,842 in April to 3,927. The vast majority of those deals were for those with a five per cent deposit, up from 34 deals in April to 112 in May, following the government’s announcement that it would help people with deposits up to a certain amount. Comparatively, those with a 10 per cent deposit saw the number of deals available to them rise by 41, going up from 440 to 481.

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

Eleanor Williams, finance expert at Moneyfacts, said the increases were the result of lenders returning deals to the sector, partly because of the government’s scheme.

Along with the increase in product choice, the average two-year fixed rate on mortgage deals fell slightly between April and May, down from 2.58 per cent to 2.57 per cent. The average five-year fixed rate, however, increased slightly, up from 2.77 per cent to 2.79 per cent.

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

Commenting on the results, Vikki Jefferies, proposition director at PRIMIS Mortgage Network, said: “The surge in the number of 95 per cent LTV deals available in the space of a month is particularly encouraging. There is clearly great momentum from lenders to return to the high LTV space – not forgetting those who have signed up to the government’s 95 per cent mortgage guarantee scheme – which is good news for first-time buyers and younger borrowers who are looking for low deposit mortgages.”

BY PETE CARVILL

Source: Property Wire

Discover our Mortgage Broker services.

Marketing No Comments

Mortgage product choice climbs back toward pre-pandemic levels

Mortgage options for borrowers increased for the seventh consecutive month with the 95% loan-to-value (LTV) market receiving a healthy injection of deals, Moneyfacts.co.uk has revealed.

It said there were now 78 more deals for borrowers with a 5% deposit but the 90% LTV sector also experienced a boost with 41 more products being added to the mix.

The only tier where availability reduced was at 80% LTV, Moneyfacts revealed. It said this could be due to providers shifting focus and increasing the number of products launched in the higher LTV tiers.

Some rates also started looking more favourable, with Moneyfacts’ data revealing, after nine months of increases, the average overall two-year fixed rate reduced by 0.01% to 2.57%.

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

However, the equivalent five-year fixed rate for all LTVs increased by 0.02% – a fifth consecutive monthly rise – to 2.79%. Moneyfacts attributed this to the steep rise in the number of traditionally higher-rated, higher LTV products now available.

What’s more, the average shelf-life of a mortgage deal increased by three days to 32, indicating that things may be calming down in the volatile residential sector, with borrowers now having a little longer to secure their chosen product.

Eleanor Williams, finance expert at Moneyfacts, said: “The sense of optimism in the mortgage sector continues, with product choice continuing its climb back towards pre-pandemic levels. After seven months of consecutive increases and 3,927 products now on offer, this represents a 53% rise year-on-year and is the highest this total has been since March 2020 (5,222).

“This positive growth compliments recent Bank of England figures, which show a boom in mortgage borrowing to levels not seen since prior to the financial crash.”

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

She added: “Higher LTV products returning and rates reducing couldn’t come at a better time as house prices continue to rocket upwards, but housing supply remains an obstacle for would-be buyers and this shortfall may well continue to drive up house prices.

“Lenders have been vocal of their confidence in the mortgage market as the UK lockdown eases, which is refreshing to see after the turmoil the pandemic created for home movers and those looking to switch their deal for all walks of life.”

Mortgage market analysis (Source: Moneyfacts Treasury Reports)
 May-20Apr-21May-21
Fixed and variable rate productsTotal product count – all LTVs2,5663,8423,927
Product count – 95% LTV4134112
Product count – 90% LTV100440481
Product count – 85% LTV208616625
Product count – 80% LTV430721710
Product count – 75% LTV554766769
Product count – 60% LTV522515527
All LTVsAverage two-year fixed rate2.09%2.58%2.57%
Average five-year fixed rate2.35%2.77%2.79%
All productsShelf life (days)342932
All productsFees (excluding no-fee deals)£985£1,053£1,051
Data shown is as at the first available day of the month, unless stated otherwise.
Source: Moneyfacts Treasury Reports

Source: Mortgage Finance Gazette

Discover our Mortgage Broker services.

Marketing No Comments

Record mortgage borrowing in March as owners move or improve

UK homeowners borrowed a record £11.8bn more on mortgages than they repaid in March, according to figures from the Bank of England.

This net borrowing level was the highest of any month since comparable data began in 1993.

The market was stoked up by stamp duty holidays and by low mortgage rates.

These factors encouraged some homeowners to move in time to beat the tax relief deadline or to borrow more to improve their current property.

Mortgage borrowing signals future demand to buy homes, and analysts have said that the UK housing market has been “on the boil” during the spring.

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

On Friday, the Nationwide Building Society said the average property price had risen by £15,916 in the year to the end of April, to reach £238,831.

Gross mortgage borrowing hit £35.6bn in March as some people tried to beat the end of the stamp duty holidays, which were then extended in England, Wales and Northern Ireland.

Andrew Montlake, from mortgage broker Coreco, said stamp duty relief was having an “insane effect” on the property market.

“This mad March mortgage data highlights the frenzied rush of people to buy in the second half of last year and save thousands of pounds on stamp duty,” he said.

“But the celebrations surrounding the stamp duty holiday may soon ring hollow if the market cools off and people find their savings have been wiped out by the premium they have paid for property. When borrowing is as extreme as this, it never tends to end well.”

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

New scheme

In April, some High Street lenders started selling mortgages to borrowers offering a deposit of just 5% under a new government guarantee scheme aimed at helping first-time buyers.

The new scheme will be available to anyone buying a home costing up to £600,000, unless they are buy-to-let or second homes.

The government is offering a partial guarantee, generally of 15%, to compensate lenders if the borrower defaults on repayments.

House hunters, particularly first-time buyers, might be helped in their quest to have enough for a deposit by families and individuals saving more. The Bank of England said deposits into accounts “remained strong in March”. Some £16.2bn more was deposited than withdrawn, the data shows.

Households also continued to pay back more than they borrowed on non-mortgage debt in March, the Bank said. A net consumer credit repayment of £535m was recorded, including people’s borrowing using credit cards, personal loans and overdrafts.

By Kevin Peachey

Source: BBC

Discover our Mortgage Broker services.

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.

Discover our Residential Mortgage Broker services.

“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

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 .

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.

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

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.

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

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

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.

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

‘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.

‘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.