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A number of building societies have been offering the  lowest mortgages over the last few weeks and many of them are undercutting the biggest lenders.

The Monmouthshire Building Society has the lowest two year fixed rate at 2.99% and it has a decent arrangement fee at £975.  Borrowers will need a 35% deposit to access the rate. This mortgage is likely to be withrawn early next week.

The Barnsley Building Society offers a five year fix at 4.69% and borrowers will need a 25% deposit - the arrangement fee is 0.25% of the loan amount and the lender will lend up to £1 million.

Aaron Strutt, a broker at Trinity Financial, says: “It is nice to see some other lenders occupying the best buy tables. Building societies are now keen to lend across the country as they see realise that there is space for them.”

February 25, 2011

Three members of the Monetary Policy Committee voted for a Bank base rate rise in February, minutes from the meeting show.

Spence Dale joined Martin Weale in voting for a rise of 0.25% while Andrew Sentence voted for a 0.5% rise. The governor of the Bank of England, Mervyn King, voted to keep rates on hold along with the other six members.

A rate rise does look like it will happen sooner, rather than later, but some think that the economy is still too weak after figures announced by the Office of National Statistics revealed that gross domestic product fell by 0.6% in the last three months of 2010.

ING economist James Knightley told the BBC: “The government spending was the only positive growth driver. This is fairly worrying given we know about the wave of fiscal austerity that is now starting to hit the UK economy, meaning that we will soon be starting to see negative figures for this component.”

Meanwhile Vicky Redwood, an analyst from Capital Economics, said: “The slight downward revision might give the more hawkishly inclined members of the MPC reason to pause for thought.”

The Chancellor George Osborne previously blamed the snow for the fall in growth but it is clear that this wasn’t the only factor.

February 25, 2011

Lloyds has reported pre-tax profits of £2.2bn for 2010, compared to a loss of £6.3bn in 2009, but the lender has seen its share of the mortgage market shrink by 2%.

Gross new mortgage lending was £30 bn in 2010, compared to £34.7 bn in 2009, representing one in five of all mortgages in the UK. Around £5bn of lending was to first-time buyers and the bank says that they approved 8 out of 10 first time buyer applications.

The average loan to value in 2010 was 60.9%, compared to 59.3% for 2009, while the average loan to value across their mortgage portfolio was 55.6%.

Eric Daniels, group chief executive of Lloyds, says: “2010 was an important year for the Lloyds Banking Group, making our return to profitability, and a further reduction in risk in our business. Our significant progress in the year has positioned the Group well to become the best bank in the UK for all of our stakeholders, including our customers, shareholders and employees.”

February 25, 2011

The Halifax will make payments to 300,000 mortgage customers, up to a £500m total, after reaching a deal with the Financial Services Authority.

The bank, now part of Lloyds Banking Group, admitted confusing customers about its right to charge them more for their standard variable rate mortgages.

The relevant mortgages were written during 2007 – 2009 by the Bank of Scotland under the Halifax brand, and through the contact programme, goodwill payments will be made to the affected customers. The potential confusion is down to the wording found in the mortgage offer which summaries the mortgage cap and this originally stated that the rate would not be more than 2% over base.

February 25, 2011

Over the last few months Trinity Financial have seen mortgage lenders start to ease credit scoring requirements and now they are now quite so tough. Big high street banks such as Santander are slightly less demanding and they will take on new customers with the odd missed payment. If you are looking for a mortgage and you have been turned down, then there are now some alternatives.

Aldermore Mortgages are a relatively new lender and they say that they will offer mortgages to borrowers where high-street lenders will not. For example, they do not credit score and they will consider lending to you if you have missed credit card or mortgage payments. If you have a county court judgment (CCJ) then most banks will not be so keen to lend to you, although Aldermore say that they will consider it.

The Kensington Mortgage Company is more of a traditional lender with a history off offering more adverse credit rates. They have both prime and minor adverse options. They will lend to those with a maximum of two CCJ’s providing that they were satisfied six months ago and to those with two defaults in the last two years.

Their two year fixed rates start at 5.89% and borrowers need a 30% deposit.

February 19, 2011

There is almost 50% more 90% LTV mortgage available today, compared to a year ago, according to the latest figures from Moneyfacts.

Over the last year more mortgage lenders have come back in to the market and there are more options if you have a 10% deposit. We have access to NatWest’s two-year fixed rate at 5.99% at 90% ltv and it has a £999 arrangement fee.

While mortgages are available if you have a 10% deposit, there are much cheaper rates available, if you have 15% to put down. Coming up with such a large deposit if you are a first-time buyer is difficult for many people, but it will allow you to benefit from lower monthly repayments.

Taylor Wimpey is offering first-time buyers 95% mortgages on a number of its developments in the East Midlands, East Anglia and East London. The funding is being provided by the Saffron and Melton Mowbray building societies and the mortgages are likely to be fixed for two years priced up to 5.99%. This is welcome news, but ideally we would see more mainstream lenders offering better mortgages.

February 19, 2011

Mortgage lenders have not been quite so active this week, although there have still been a host of rate increases. The Nationwide and Chelsea Building Societies, ING Direct and Abbey have are just a few of the big names to hike rates.

Abbey for Intermediaries was offering a great four year fixed rate at 3.99%. However, that has now increased to 4.49% and Barclays are still not offering five year fixes. There are now less long term mortgages available as we wait for the withdrawn mortgages to be replaced.

Aaron Strutt, a broker at Trinity Financial, says: “While we have not seen as many changes this week there has still been a huge amount. We have seen more banks offering mortgages with big arrangement fees and many lenders have put fixes up by 0.5%. There are alterative options available and we are happy to tell you the best rate we can secure for you.”

February 18, 2011

The average number of potential buyers registered with estate agents rose to 252 during the month, up from 227 in December, although the figure was 13% lower than January last year, according to the National Association of Estate Agents (NAEA).

There was also a slight increase in the number of homes on the market, with the average estate agent having 69 properties on their books, compared to 64 in December.

The NAEA also reported an increase in sales, with typical estate agent selling six properties in January, up from four the previous month.

Michael Jones, president of the NAEA, said: “It is encouraging to see activity levels begin to increase following the downturn we saw in December where bad weather and the Christmas festivities kept many house-hunters away.

“However, when compared with our report from this time last year, the market is still showing signs of consumer reluctance. Macro-economic issues such as the VAT rise and interest rate pressure continue to put many people off searching for property.”

February 18, 2011

A huge amount of lenders have increased or withdrawn their mortgage rates this week as, once again, rates have increased.

Skipton announced that they have withdrawn the majority of their mortgages and that they will not replace the most popular deals for ten days. Abbey, C&G, ING Direct, Coutts and The Nottingham B.S are just some of the lenders to make changes. ING Direct removed some of their five year fixes and Britannia withdrew their ten year mortgages.

Northern Rock increased two year fixes by 0.3% and five year fixes by 0.4%. In a break from the norm, Halifax reduced the price of many of their rates and some by as much as 0.7%.

Aaron Strutt, a broker at Trinity Financial, says: “It has been a particularly busy week as the cost of fixed rate mortgages in particular has increased. Once a lender starts to raise rates it often doesn’t take long before we see other lenders follow - but this week they all seem to have made changes.

“For the moment fixes are certainly starting to increase but there are still some decent options. Two year fixes are still low and we have access to some great four year fixes at 3.99%. Woolwich like four year deals so much that they removed all five year fixes and replaced them with four year rates.

“We are expecting more rises over the coming weeks so if you are thinking about buying a property and you want to fix, it would be a good idea to secure a rate now.”

February 11, 2011

The Bank of England’s Monetary Policy have kept UK interest rates on hold at 0.5%. The majority of economists predicted that base rate would remain the same, although there is more of an expectation that base rate will increase sooner rather than later.

A rise of approximately 0.5% is more widely expected before mid 2011

February 10,   2011

There have been a number of rate reductions as lenders compete to attract mortgages over £1 million.

Abbey have a made changes to their   rates available up to £2 million and Halifax have also lowered fixes by up to 0.3%, also on their £2 million range.

Aaron Strutt, a broker at Trinity Financial, said: “It has been an interesting week. Many of the banks have continued to raise rates, although we have seen more lenders lower their large mortgage offerings on the back of Abbey’s changes. The Mortgage Works have launched some very low fixes starting at 2.15%, although they do have some big fees.

“Paragon have updated their buy to let rates and many arrangement fees have been lowered and capped at £2000. There’s a selection of fixed and LIBOR trackers that Trinity Financial can access.”

February 4, 2011

Santander UK has released its full year results for 2010 and they show that they retained their 18% share of the mortgage market, despite seeing a slight drop in gross mortgage lending.

It completed £24.2 bn of gross mortgage lending in 2010, slightly down on £26.4 bn in 2009. In the first six months of 2010 it had gross lending of £12.3 billion, slightly up on the last six months when it did £11.9 bn in gross mortgage lending.  Overall Santander UK made a profit after tax of £1.7 bn up 11% on 2009.

Interestingly, Santander’s stock of properties in possession increased slightly to 873 cases from 820 in 2009, but still represent only 0.05% of their lending book. The mortgage non-performing loan ratio decreased for the third consecutive quarter to 1.29% from 1.37% a year ago.

Santander’s borrowers had a average deposit of 37% in 2010 and the average property mortgaged with them is just over 50% loan to value.

February 4, 2011

The average cost of borrowing on a credit card has risen to a 13-year high of 18.9 per cent, says Moneyfacts.co.uk. According to their research, the last time credit card rates were this high was in 1998 when the Bank of England base rate was at 7.25%.

At the current rate of 18.9 per cent borrowers with a £5000 debt on their card, who repay the minimum amount each month, will now be repaying an additional £2,360 in interest over the length of the loan compared with February 2006, when average rates were at 14.8 per cent, according to figures in The Times.

February 4, 2011

Kent Reliance Building Society have become the OneSavings Bank Plc, after it was granted a banking licence by the Financial Services Authority.

The bank will trade as Kent Reliance Banking Services, Kent Reliance or kbrs and will take on the savings and loss-making mortgage book from the former building society.

Kent Reliance was able to transform the way it operates because of a £50 million capital injection from private equity firm JC Flowers & Co. The building society was Britain’s twelfth largest with 102,000 members and it dates back more than 160 years.  Savers will become members of the Kent Reliance Providence Society, which will hold a majority of ordinary shares in the OneSavings Bank.

Mike Lazenby, chief executive of Kent Reliance, said: “This is the culmination of more than a year of consultations with our advisors, working to produce a structure capable of introducing fresh capital into the business, whilst retaining mutuality for our members – we are effectively taking our mutuality to another level.”

“We will be a bank run on mutual principals, providing customers with affordable, competitive banking services – whether they choose more traditional branch-based forms of banking or whether they deal with us online.”

February 4, 2011