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March 28, 2010
Coventry building society merges with Stroud & Swindon
The Coventry building society, the UK’s third largest, will take over the financially troubled Stroud & Swindon with effect from the September 1.
The merger will mean that Stroud & Swindon’s head office will close and be moved to Coventry. This is likely to result in job losses. The new bigger society will have 1.5 million members and 91 branches in the West Midlands and South West of England.
This is the latest in a long line of building societies that have either merged or been taken over. In February the Chesham, the UK’s oldest society, agreed to be taken over by the Skipton, and last December the Yorkshire agreed to take over the Chelsea. The Nationwide have been the busiest society as they have taken over The Derbyshire, Cheshire and Dunfermline building societies.
March 26, 2010
Stamp duty cut for first-time buyers
Stamp duty has been removed for first-time buyers purchasing a property up to £250,000 in an effort to get the housing market moving again. To fund this cut, stamp duty will be raised from four, to five percent from April 2011 for properties over £1 million. Judging by the reaction to the chancellor’s announcement, there is still a lot of confusion about how it will affect home-buyers and how they will be able to check if someone really is a first-time buyer.
Trinity Financial has spoken to a number of solicitors and they say that it will be virtually impossible to check if buyers really are buying for the first-time. At present, solicitors are asking their clients to confirm that they are first-time buyers in writing and funds that they have received to pay to HM Revenue and Customs (HMRC), have been sent back to clients who have now stated they are first-time buyers.
Stamp duty is a personal tax and solicitors submit information they receive from their clients. There is normally a nine month window for HMRC’s to check that the correct level of stamp duty has been paid. Although, HMRC can in fact still claim any unpaid stamp duty up to 21 years after the date the tax should have been paid.
March 26, 2010
Woolwich and Northern Rock lower their fixes
Woolwich have introduced a new range of fixed rates for borrowers with a 30% deposit. Their lowest two-year fix is a fantastically low rate of 3.39% and with a maximum loan size of £1 million; it will really offer protection from possible base rate rises over the next two-years. The arrangement fee is slightly higher than average at £1499.
For those that would prefer a slightly lower fee, Woolwich offer a two-year fix at 3.59% with a £999 arrangement fee. Both mortgages are also available to those looking to remortgage and, if you do switch to the Woolwich, they will pay the property valuation and legal costs involved.
Northern Rock lowered their two and five-year fixed rate mortgages this week for borrowers with a 15% deposit. The two-year fix is 5.49% and it has a £595 arrangement fee.
Abbey have consistently offered leading mortgages. Their lowest two-year fix is 3.44% and cheapest tracker is 2.49%. Both rates are available to those with 30% deposit and there is an arrangement fee of £995.
Trinity Financial can access Abbey’s exclusive mortgage range. For existing current account customers there are lower rates available. For example, two-year fixes are as low as 3.49% for those with a 30% deposit and two-year trackers are available at 2.85% - for borrowers with a 25% deposit. Both mortgages have a free property valuation and cash back if you are purchasing or remortgaging a property.
March 29, 2010
More mortgage products available
The number of mortgage products available now is just over the 2000 mark, a 70% increase on the 1209 available on April 1 2009, according to Moneyfacts, the comparison website.
There is no doubt that the mortgage market has recovered considerably over the last year and that there are a lot more rates to choose from. Borrowers still need a deposit of at least 10%.
March 19, 2010
Increase in overpayments
Lloyds Banking Group have increased the maximum overpayments allowed for customers of Cheltenham and Gloucester and Halifax. Previously, overpayments were limited to 10% of the loan amount each year, but that has now been increased to 20% per year.
Aaron Strutt, a broker at Trinity Financial Group, says: “This decision will be welcomed by many of Lloyd’s customers, who have cash that they would like to pay in to their mortgage. That said, Lloyds have not made this decision for the good of their customers. This policy change is an attempt to get in more money to boost the cash side of their balance sheets.”
Anybody wanting to make further overpayments on their mortgage should be aware that they may not be able to get the money back. So, it is important they can afford to lose access to the money. Offset mortgages are a particularly good option for those who do want access to their money. Trinity Financial has a selection of offset mortgages that are particularly popular with our clients.
March 19, 2010
Mortgage lending up in February
Gross mortgage lending increased to an estimated £9.2 billion in February, a 6% rise from £8.7 billion in January, according to figures released by the Council of Mortgage Lenders (CML).
CML economist Paul Samter comments on the latest figures: ”As we look forward, we expect emerging signs of improvement as confidence in the economy grows and we move past the election. However, the need for the authorities to address fiscal deficit will inevitably slow the economy. At the same time the funding markets, while certainly better than a year ago, remain difficult and will likely limit the flow of available housing finance.”
According to the CML, the first two months’ lending figures are broadly in line with their forecast for lending of £150 billion for 2010 as a whole.
CML members are banks, building societies and other lenders which together lend around 94% of the residential mortgages in the UK. There are 11 million mortgages in the UK worth over £1.2 trillion.
March 19, 2010
New market leading four-year fixed rate
The biggest rate reduction this week was from Abbey. They reduced their four-year fixed rate by 0.35% and now offer a market leading fix at 4.49%. Borrowers will need a 30% deposit and there is a £995 arrangement fee. The maximum loan is £1 million and there is a free property valuation.
The lowest two-year base rate tracker mortgages start at 2.49% and fixes from 3.44%. Both mortgages are available to those with a 30% deposit and they have £995 arrangement fees.
Historically, Trinity Financial have advised their clients that mortgages below 5% offer excellent value for money.
March 12, 2010
The number of mortgage agreements fall
There were 24,000 remortgages in January 2010, compared with 45,000 a year ago, the lowest monthly level of remortgage activity in eight years, according to figures released by the Council of Mortgage Lenders.
Many borrowers are more than happy to stay on their lenders standard variable rate. With Nationwide and C&G’s standard variable rate pegged at 2% over base, it is no real surprise homeowners do no want to remortgage. However, there are still millions of borrowers sitting on uncompetitive variable rates that do not realise how much they could be saving by either switching to another one of their current lenders existing customer deals, or through remortgaging to another bank.
Trinity Financial advises their clients to call their lender to see if they will be offered a lower rate, then to do their homework to see how competitive that rate really is.
The number of loans approved for homebuyers rose in January 2010 - 32,000 loans were approved - up from £23,000 in January 2009.
March 12, 2010
New parent guarantor mortgage launched
The Mortgage Works, who are the specialist intermediary lending arm of Nationwide, have launched a range of limited liability guarantor mortgages specifically designed to make it easier for parents to use their income to help their children get on the property ladder.
Virtually all guarantor mortgages require the parent’s income to cover the entire mortgage, as well as any existing loans, mortgages or ongoing commitments. Due to the large income previously required, it has been difficult for the less wealthy to help their children to get a mortgage.
The new limited liability scheme is unique to the market and will help those with lower incomes. Parents will be required to cover just 40% of the loan, as well as any of their existing ongoing financial commitments.
The guarantor will only be liable for 40% of the debt, rather than the entire mortgage, in the event of the property being repossessed.For those with incomes large enough to make them eligible for a standard guarantor loan, there are a range of market leading mortgages available. Mortgages are slightly more expensive for this new type of limited liability lending and a minimum deposit of 15% will be required.
March 12, 2010
Rates reduced for borrowers with a 20% deposit
Northern Rock and Abbey have made significant cuts to their mortgage rates aimed at borrowers with a 20% deposit. Abbey reduced their mortgages by up to 0.75% and Northern Rock by 0.5%.
Trinity Financial can now access excellent rates through Northern Rock for borrowers with a 20% deposit. Two-year trackers start at 4.49% and two-year fixes at 4.89%, with both mortgages having a £595 arrangement fee.
Abbey now offer a two-year tracker rate at 3.94% and a two-year fixed at 4.95% to those looking to purchase a property. They will even provide a free property valuation and free legals. Both mortgages are available to those with a 20% deposit and they have £995 arrangement fee.
Trinity Financial Group on Radio 5 Live
Aaron Strutt, a broker at Trinity Financial Group, was a guest on Radio 5 Live on Wednesday when he gave good news on reducing rates.
He told listeners that this has been a good week for mortgages. ”There have been a number of lenders that have reduced their mortgage rates and made them considerably cheaper.
“Increased competition between the lenders is one reason for better mortgage rates being made available, but there is also now more confidence from the banks and building societies. This is feeding though into the market.
“Borrowers with a 30% deposit can access the most competitive mortgages. Abbey have some of the lowest rates with their two-year tracker at 2.49% and two-year fixed at 3.44%. Both mortgages have a £995 arrangement fee.
Tesco in joint venture to launch online estate agency
Tesco have teamed up with Spicerhaart to launch the new online estate agency www.iSold.com, which will sell homes for fees starting from £999.
Their website says that they will offer all of the services of an estate agency, with lower fees.
Initially iSold.com will be launched in Bristol and, if successful, rolled out to the rest of the country. They will offer three flat fee price packages from £999 for the basic service rising to £1299 for their premium service.
The website has an online valuation box so homeowners can put in their postcode and receive an automated valuation. This will then be confirmed by a follow up visit by one of their property valuers.
This is not Tesco’s first attempt at launching a new estate agency – in 2007 a business named Tesco Property Market offered homeowners a £199 flat fee to advertise on their website. Tesco quickly decided that this site was unlikely to be profitable and sold it to Spicerhaart.
Base rate held at its record low of 0.5%
The Bank of England base rate has stayed at its record low of 0.5% for the 12th consecutive month.
This will be welcome new for the millions of borrowers on base rate tracker mortgages and a relief to those sitting on their lenders standard variable rate.
The Monetary Policy Committee decided not to extend its quantitative easing programme beyond £200 billion, but has not ruled out any further cash injections in to the economy.
With an election coming up many feel that this could have a considerable effect on interest rates. For those in a position to remortgage, the security of a fixed rate could provide protection from future base rate increases.
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