August 28, 2011
Million pound mortgages get cheaper
Many high-street lenders now offer mortgages with maximum loans available up to £1 million and rates have continued to get lower this week.
Nationwide Building Society has one of the cheapest fixed rate mortgages available up to £1 million. It is a two-year fix and the rate is extremely competitive at 2.64% - it has a £999 arrangement fee. The Clydesdale Bank lowered the price of a number of their mortgages this week and their lowest two-year fix is now 2.69% and it has a £1499 arrangement fee. Both mortgages require a 40% deposit.
Aaron Strutt, a broker at Trinity Financial, says: “For clients wanting to borrow more than a million we have access to lenders with highly competitive rates. Many banks were not happy to lend large sums of money a few years ago, but there has been an increase in the demand for high-end mortgages and the appetite from the lenders has certainly increased.
“If you would prefer the security of a longer term fixed rate and you have a 35% deposit, then you might like the Coventry Building Society four-year rate. It is fixed at 2.99% and it has a £999 arrangement fee. There is a free property valuation and the maximum loan is £1 million.”
August 26, 2011
Top six lenders did over 81% of mortgage lending in 2010
The top six mortgage lenders accounted for 81.5% of the total volume of lending undertaken last year, according to figures from the Council of Mortgage Lenders (CML).
Lloyds Banking Group retained its position as the largest mortgage lender in 2010. It had an estimated market share of 22.1% and lent around £30 bn of gross mortgage lending. Santander claimed second place, with 17.8% market share.
Barclays is the third largest lender with a 12.4% market share, followed by The Royal Bank of Scotland, Nationwide Building Society and HSBC.
There were a number of new entrants into the CML’s top 30 lenders and they each had less than 0.5% of the estimated market share. They include: Saffron Building Society, Cambridge Building Society, UBS, Aldermore Mortgages and Market Harborough Building Society.
August 26, 2011
New Zealand looking to recruit Irish builders
New Zealand has said that it needed at least 8,000 construction workers to help to rebuild and repair about 100,000 homes damaged in the earthquake in February, which killed 181 people. The story was in The Times on August 20, 2011.
There were hundreds of commercial buildings either damaged or destroyed and they need to be rebuilt. Ian Simpson, chief executive of the country’s Earthquake Commission, is quoted as saying that although the New Zealand labourers would be given first priority, it was keen to attract Irish workers because they were skilled, spoke English, and many were unemployed.
There has been a strong demand to take up the offer of work in New Zealand, according to Declan Clune, a licensed adviser for New Zealand at Visafirst.com. He told The Times that many workers are keen to find out how to get a visa and employer sponsorship. There is demand for engineers, quantity surveyors, construction project managers, foreman, scaffolders and electricians. Many people in Ireland are likely to have these skills because of their recent property boom.
New figures show that 100,000 people will have left Ireland in the two years to April 2012, more than 2 per cent of the population.
August 26, 2011
Burnley has the cheapest homes
Burnley has the cheapest homes to buy anywhere in England and Wales, according to Mouseprice.com. The cheapest homes were found on Angle Street, where the average property cost £32,400 in the last year.
Burnley has a population of just fewer than 80,000. Earlier research by the property website found that homes in Victoria Road in Kensington, west London, cost the most averaging £6.4m.
August 26, 2011
Yorkshire appoint HSBC banker as new chief executive
Yorkshire Building Society has appointed a senior HSBC banker as its new chief executive. Chris Pilling will replace Iain Cornish at the top of the UK’s second largest building society by the end of this year.
The building society has ambitions to grow and is offering some particularly cheap mortgages through its broker lending arm - Accord Mortgages.
Yorkshire took over Barnsley Building Society in 2008, followed by Chelsea Building Society last year and more recently struck a deal to take over the savings and mortgage division at the online bank Egg.
Members of the Norwich & Peterborough Building Society voted in favour of a merger with the Yorkshire this week. The deal is expected is go ahead by November this year after 89.61% of savers and 87.22% gave their support to the move.
August 26, 2011
New four-year fixed rate mortgage from 2.99%
The Coventry Building Society has added to its range of market leading mortgages by offering new two, three and four-year fixed rates and they are all priced at 2.99%.
Traditionally four-year fixes have not been available as the banks have looked to offer five-year fixes. But they can now access cheaper funding for mortgages over four-years and they are a decent alternative. Borrowers will need a 35% deposit to access the new Coventry rates and the arrangement fees range from £498, to £1999.
Lenders have continued to lower their mortgage rates and Woolwich recently reduced over 40% of their mortgages by up to 0.55%. The Skipton Building Society also lowered their fixed rates by up to 0.30%.
The Nationwide Building Society has been slowly chipping away at the price of their mortgages and they now offer a market leading three-year fix at 2.89%. The arrangement is £999 – unless you are a first-time buyer as you will get £500 off of the arrangement fee. A 30% deposit is required.
Aaron Strutt, a broker at Trinity Financial, says: “It has turned into a battle to offer the lowest mortgages and if the banks can’t offer the lowest two or five-year rates, they are now looking at alternatives like four-year fixes. Nationwide offer £500 off arrangement fees on all of their mortgages if you are a first-time buyer.
“Trinity has access to the lowest tracker rates. The Skipton Building Society is offering a two-year tracker rate at 1.99% if you have a 50% deposit and it has a low arrangement fee at £995. For borrowers with a 40% deposit, the rate is 1.98% but the arrangement fee increases to £1995.”
August 15, 2011
Mortgage lending increased in June
Mortgage lending increased in June, albeit from a low level, the Council of Mortgage Lenders has said.
The total number of new home loans to house buyers rose by 22% from May, to 46,700, worth £6.7bn. The number of first-time buyers reached a 10-month high, up 24% from May to 18,100 and this was worth a total of £2.2bn.
The popularity of fixed rate mortgages continued to increase in Q2, with 63% of borrowers opting to fix, compared to 60% in Q1 and just 46% in Q2 2010.
Paul Smee, director-general of the CML, says: “There are clearly financial uncertainties ahead, but it’s encouraging to see more house buyers surfacing at the start of the summer. Recent increases in Bank of England approvals figures also show that more completions are expected in July, so the more encouraging numbers may persist for a while.”
August 12, 2011
Riot cover unlikely for new insurance customers
Insurers may adjust the small print in their policies so that they discount rioting and civil disturbance after the riots across England. The violence caused ten of millions of pounds worth of damage and a leading insurance spokesman says that there is a danger it will not be covered in some new policies.
After the volcanic ash cloud incident last summer, a number of the biggest insurance companies altered their travel insurance policies so that new customers would not be covered if their holiday was disrupted by an ash cloud. According to a recent report, Aviva, Barclays, Churchill, More Than and NatWest have all kept ash cloud cover for existing customers, but removed it for new ones.
A spokeswoman for insurance provider LV= said: “All of our customers are fully covered from riots and civil disturbance and we will continue to cover them with no intention of changing our policy on it, just as we did during the volcanic ash cloud incident.”
August 12, 2011
Smaller lenders look to offer 100% ltv and low deposit mortgages
Northern Bank, which only lends to Northern Ireland residents, offers a number of mortgages up to 100% loan-to-value to existing current account customers.
Two other lenders say that they will lend up to 100% of the property value, including the Teachers Building Society and the Tipton & Coseley Building Society. Qualifying for both mortgages will be particularly tricky because they are not widely available.
To get a 100% loan-to-value mortgage with the Teachers Building Society you would need to secure 20% funding from the government Home Buy scheme and one applicant on the mortgage would need to be a qualified Teacher or Learning Assistant.
The Tipton’s 100% offering will require a family member to give permission for a collateral charge to be taken on their home and the property must be in the Midlands counties.
There are more lenders offering 95% loan-to-value mortgages and many of them are available through regional building societies. The Cambridge Building Society is the latest society to offer 95% loan-to-value rates.
Trinity Financial has access to the Skipton Building Society two-year fixed rate at 5.99% for borrowers with a 5% deposit and the arrangement fee is £195.
August 12, 2011
Mortgage news, offers and statistics
- There were 32,000 buy-to-let mortgages worth £3.5bn advanced in Q2 this year, the highest number and value since 2008. This represents an increase of 16% by volume and 21% by value on the previous quarter.
- The number of properties repossessed by first charge mortgage lenders in the first half of 2011 was 7% lower than in the first half of 2010, according to the Council of Mortgage lenders. There were 9000 repossessions in the second quarter of this year, compared to 9100 in the first quarter. The number of mortgages with low levels of arrears between 1.5% and 2.5% of the outstanding balance, edged up from 77,800 to 78,500.
- A second charge finance company is offering to lend to up to 85% of the property’s value to self-employed borrowers. There is no credit scoring and they will accept an accounts certificate as proof of income.
- Almost of a quarter of landlords are feeling more optimistic about the prospects for their property portfolios, rental income and yields, according to the Paragon Private Rented Trends Report.
August 12, 2011
Accord Mortgages launches into buy-to-let
Accord Mortgages, the intermediary lending arm of the Yorkshire Building Society, has launched into the buy-to-let market for the first time.
The lender offers many of the lowest residential rates and will now expand their product range into investment mortgages to manage demand. For a brief trial period applications will be limited to properties in London and the South East, but there are plans to widen the geographical availability later in the year.
Aaron Strutt, a broker at Trinity Financial, says: “Accord will be trying to attract borrowers in a very competitive market as a number of building societies have low rates and low arrangement fees. The best buy-to-let rates are not much more expensive than many residential mortgages as competition to lend has increased considerably over the last few months.
“Trinity Financial can access buy-to-let rates that do not require a minimum income. We’re helping a number of our clients to remortgage their property portfolios to generate capital to purchase more property. We have seen an increase in buy-to-let house purchases because of the increase in rents.”The Skipton Building Society has launched two market leading fixed rates for investment mortgages starting at 3.24% and Northern Rock is offering £750 cash back on a selected buy-to-let rates.August 5, 2011
RBS reports a £794m loss
The Royal Bank of Scotland has reported a loss of £794m in the first six months of the year, compared with a £1.1bn profit last year.
It went into the red because of the £850m provision made to cover compensation for customers who were mis-sold payment protection insurance and a £733m provision in relation to Greek government bonds.
Gross new mortgage lending in the first six months at RBS totalled £7.8bn, marking a 10% share of the market, with the average loan-to-value from new business at 54.9% – compared with 64.2% in 2010.
Northern Rock PLC, the ’good part’ of the bank, reported gross mortgage lending of £1.5bn in the first six months of the year, down from £2bn in the same period last year. The results show an underlying loss of £78.8m in the first six months of 2011, compared with a loss of £140m in the same period last year.
Ron Sandler, executive chairman of Northern Rock, says that he expects to begin trading profitably during the second half of 2012. He is quoted as saying: “Northern Rock has made good progress in the first half of 2011. The company continued to be loss-making, as expected, but losses are significantly reduced and we are generating more momentum.”
August 5, 2011
FOS receives 56,025 PPI complaints in three months
The Financial Ombudsman Service (FOS) received 56,025 complaints relating to the mis-selling of payment protection insurance between April and June 2011.
Some 55% of the complaints were upheld in favour of the consumer. During the quarter the FOS received an average of 900 payment protection insurance cases each working day.
August 5, 2011
Base rate kept on hold at 0.5%
The Bank of England Monetary Policy Committee (MPC) has kept base rate at its record low of 0.5% once again. The Bank also kept its program of quantitative easing at £200bn.
In a poll by the BBC, a majority of economists expected interest rates to remain unchanged next year. The survey asked 32 forecasters, who are regularly polled by the Treasury, what they thought will happen to interest rates. The vast majority, 26, predicted that there would be no rise this year, and three said there would be no rate increase until 2013.
Minutes from the MPC meeting in July showed that the voting went seven to two in favour of holding rates at 0.5%.
August 5, 2011
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