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Abbey for Intermediaries has made changes to their mortgage affordability calculators and they will now take the amount you spend at Christmas and birthdays into consideration.

The lender will ask all Abbey for Intermediary and Santander customers to list regular and non-regular monthly costs.

Examples of regular expenditure include food, drink and clothing, also transport and maintenance payments.  Non-regular expenditure includes subscriptions, holidays, religious festivals and birthdays.

Aaron Strutt, a broker at Trinity Financial, says: “Mortgage lenders take all sorts of things into consideration when they work out how much you can borrow. Children’s school fees and travel expenses are quite normal, but I have not noticed birthdays and religious festivals being in any of the other banks’ affordability questions.”

“Abbey are a generous lender when it comes to income stretches, so it will be interesting to see if the new rules change things.

“Santander also uses averages from the office of National Statistics to obtain the typical expenditure for customers.”

February 27, 2012

Leeds Building Society has changed their interest-only lending policy and borrowers will now need a 50% deposit if want to use the sale of their property as a method of repaying the mortgage.

The lender previously asked borrowers for a 30% deposit if they wanted to sell their home and repay the mortgage with the proceeds.

It is still possible to take interest-only if you have a 25% deposit, although you will have to use contributions to an ISA or a savings plan as a vehicle for repaying the mortgage.

Last week, Accord Mortgages told Mortgage Solutions magazine that they had seen a considerable uplift in interest-only applications after both Santander and Lloyd’s announced changes to their lending criteria.

February 27, 2012

Firms paid out £1.9bn in payment protection insurance redress last year, according to the latest figures from the Financial Services Authority.

Payments were £441m in December 2011, the largest month so far for PPI compensation pay-outs.

The Financial Ombudsman Service is taking 1,000 new PPI complaints every day. The majority of the potential claims are about policies often sold by banks alongside credit cards and loans.

February 27, 2012

Gross mortgage lending was an estimated £10.5bn in January. Lending fell by 14% from £12.2bn in December but was 10% higher than the total of £9.5bn in January 2011. This is according to the Council of Mortgage Lenders.

Although a seasonal decline is expected, January was the sixth month in a row of higher year-on-year lending.

CML chief economist Bob Pannell says: “Housing and market sentiment has improved in recent weeks.

“The increase in lending compared to January last year helps support our view that housing and mortgage market activity may be boosted by first-time buyers seeking to compete deals before the stamp duty concession ends in March.

“Should inflationary pressures continue to fall back, the squeeze on household finances should ease progressively and help support stronger economic recovery going into the second half of the year. This can only be good news for the housing market further down the track.”

February 27, 2012

Mortgages lenders are tightening their qualification criteria on the back of concerns about being sued, according to mortgage industry trade bodies.

The Council of Mortgage Lenders and the Intermediary Mortgage Lenders Association (IMLA) are warning that proposals in the FSA’s Mortgage Market Review could pave the way for lenders to be sued if mortgage repayments methods are not suitable.

John Heron, chairman of IMLA, says that lenders are expected to check the appropriateness of a particular mortgage repayment vehicle and it raises questions about where the responsibility lies if it fails.

“If it is going to be judged in retrospect, will lenders have been expected to assess the robustness of the repayment vehicle according to information at the time or future considerations?

“You can understand why lenders are likely to address this by constraining their criteria.”

February 27, 2012

Yorkshire, the UK’s second-largest building society, reported a positive financial performance in 2011.

The Society increased profitability, raised core operating profits by 27% to £163m and also improved its lending by 46%. Last year the lender took over the Norwich & Peterborough Building Society and Egg Bank Plc.

February 27, 2012

The length of time tenants spend in private rented accommodation is increasing, according to the latest figures.

Private tenants are typically renting their homes for a record duration of 19 months.

The average length of a tenancy has risen by 17 per cent in two-years – from 16 months and two weeks to around 19 months – by the end of 2011. This is according to the Association of Residential Letting Agents (Arla).

Ian Potter, operations manager at Arla, said: “Possibly as a reaction to tough financial times, tenants are spending longer in properties.”

LSL Property Services has reported that average monthly rents dipped slightly to £711 in December 2011.

February 17, 2012

Two large building societies have temporarily withdrawn nearly all of their residential mortgage rates via brokers to enable them to control lending volumes and case processing times.

Skipton Building Society sent an email to brokers explaining that they have started 2012 unbelievably well and that in January they were pushing at 150 per cent of their forecasted lending.

Accord Mortgages pulled their mortgage rates to concentrate on managing the applications that they already have, rather than causing borrowers unexpected delays.

Aaron Strutt, a broker at Trinity Financial, says: “It is unusual for a lender to withdraw all of their mortgages because they are so far ahead of their lending targets.

“Accord and Skipton have said that they will come back to the market with new rates shortly, but other lenders have also been busy. Halifax and Northern Rock increased the cost of their mortgages to manage application levels.”

If you are looking for a quick mortgage offer, Trinity Financial will submit your application to a lender with good rates and efficient processing times.

One of the most competitive mortgages that we have access to is a term tracker rate at 2.80%. The maximum loan-to-value is 80% and the arrangement fee is £1,295. For mortgages over £500,000 the arrangement fee increases to £2,495 and there are early repayment charges of 1% for the first 12 months.

February 17, 2012

After ending 2011 close to all-time lows, consumer confidence staged a modest recovery at the start of 2012, picking up by nine points to 47.

According to Nationwide Building Society’s Consumer Confidence Index for January, confidence remains subdued by historic standards. Their Index for January is almost 30 points below the long-term average.

Robert Gardner, Nationwide’s chief economist, said: “Given the challenging economic backdrop, with the UK economy contracting in the final quarter of 2012 and the unemployment rate rising to its highest level since 1995 in recent months, the improvement may prove to be a little more than a temporary bounce.

“However, a number of other economic indicators have also surprised and been more positive than expected in recent weeks, which may be an indication that underlying economic conditions are not as weak as feared.”

Consumers expressed a greater propensity to spend on household goods in January with 40% of people believing it to be a good time to buy. This is up from 31% in December and has now reached its highest point since the introduction of the 20% VAT rate a year ago.

February 17, 2012

Lloyds Banking Group has made substantial changes to their interest-only mortgage qualification criteria.

It is now more difficult to qualify for interest-only and any borrowers unable to meet the tighter criteria will be asked to take a capital-repayment mortgage.

The new lending criteria now states that pensions included into the mortgage calculations must have a minimum current value greater than £1 million and up to 25% of the current fund value can be used to support interest-only lending.

Cash savings are no longer accepted as a repayment vehicle for interest-only.

Febuary 17, 2012

The Advertising Standards Authority has upheld a complaint against two television ads for NatWest and Royal Bank of Scotland.

A councillor and the Campaign for Community Banking Services successfully challenged the banks “last bank in town” advert on the basis that some branches had substantially reduced opening hours, or have been replaced by visits from a mobile bank.

February 17, 2012

Moody’s, the credit rating agency, has warned that it may cut the credit ratings of 17 banks, including Morgan Stanley, UBS and Credit Suisse. Nine of the banks are based in Europe and include Barclays, HSBC and Royal Bank of Scotland.

Alexander Potter, banking specialist at Berenberg Bank, told the BBC that the riskiness of these banks has already been reflected in prices for the banking sector on the credit default swap market for some time.

Mr Potter is quoted as saying: “This follows a similar review by S&P and credit spreads highlight the fact the market is already, in most cases, well ahead of the slow-moving ratings agencies.”

February 17, 2012

Santander and Abbey for Intermediaries have reduced their maximum loan-to-value for interest-only mortgages from 75% to 50%.

Under the bank’s new criteria, individuals will be able to borrow only a maximum of 50% of the value of their property on an interest-only basis. Anyone borrowing above this loan-to-value will have to take a full capital-repayment mortgage.

Aaron Strutt, a broker at Trinity Financial, says: “Santander’s policy change is one of the toughest yet and they have gone much further than the handful of lenders that make first-time buyers take their mortgages on a full capital repayment basis.

“I have spoken to some of the bigger lenders and they are surprised at Santander’s new stance, especially as they have always been happy to lend on interest-only. They don’t expect to follow Santander’s lead, but they can’t rule it out.”

Banks and building societies have tightened their interest-only lending criteria after the Financial Services Authority expressed concerns as part of its mortgage market review.

According to the FSA, approximately 75% of borrowers who took out an interest-only mortgage in 2007 had declared no repayment vehicle.

February 10, 2012

The number of properties being bought with buy-to-let mortgages increased to 84,000 in 2011, according to data from the Council of Mortgage Lenders.

During the fourth quarter of 2011, a total of 34,800 buy-to-let mortgages were advanced with a total value of £4bn.

Paul Smee, director-general of the CML, says: “Buy-to-let continues to perform well. Demand for rented property remains high, so the rationale for buy-to-let remains strong and there is little reason to foresee any change to this positive outlook for the sector.”

Buy-to-let mortgages account for nearly 13% of the total outstanding value of mortgages in the UK.

February 10, 2012

The Bank of England’s Monetary Policy Committee (MPC) has voted for more quantitative easing (QE) and will increase the size of its asset purchase programme by £50bn.

The aim is to give a further stimulus to the UK economy and this will take the QE programme to a total of £275bn.

The MPC also said that it would keep interest rates on hold at 0.5%.

February 10, 2012

More than a third of UK properties currently for sale have had their asking prices lowered at least once, according to property website Zoopla.co.uk.

The average discount available off of property now is £19,580, or 7.5%.

The average discount is more than £1,000 higher than this time last year, with the biggest discounts in Glasgow (9.2%), Blackpool (9%) and Maidstone (8.5%).

February 10, 2012

The number of properties taken into possession in Q4 2011 totalled 8,500, 5% higher than the 8,100 home repossessed in the same period in 2010, according to data from the Council of Mortgage Lenders.

Low interest rates and good arrears management by lenders helped to keep repossessions figures low.

The number of properties repossessed in 2011 as a whole was 36,200, down from 37,100 in 2010.

February 10, 2012

The number of buy-to-let mortgage rates has doubled over the last two-years, according to Moneyfacts.

More banks and building societies plan to increase lending in this area and some intend to provide more buy-to-let lending than residential.

There are currently 486 buy-to-let mortgages available compared to 243 in February 2010.

Six lenders offer buy-to-let mortgages to investors with a 20% deposit, which is well up on the number available three months ago. The lenders include:  Aldermore Mortgages, Leeds Building Society and Clydesdale Bank.

Aaron Strutt, a broker at Trinity Financial, says: “This is good news for landlords and investors. It demonstrates the growing confidence in the buy-to-let market. During the height of the credit crunch many banks thought buy-to-let was a high risk area and virtually stopped lending. Things have certainly changed.”

One of the most competitive buy-to-let mortgages available through Trinity Financial is a two-year tracker rate at 3.49%. It has a £1,499 arrangement fee and the lender will pay the property valuation fee.

February 3, 2012

Buying a home works out at over £100 a month cheaper than renting in the UK, according to research by Halifax.

The Halifax Buying vs. Renting Review shows that the typical monthly cost of buying a three bedroom house was £600 in December 2011, 16% cheaper than the average monthly rent of £716 on the same property type.

The research also suggests that home buying costs have fallen by more than a quarter or £328 since 2008. This has been driven by the fall in the average monthly mortgage rate from 5.75% to 3.63% and a reduction in house prices in many areas.

Halifax says that buying a home was more cost effective than renting in 11 out of 12 UK regions when the survey was conducted in December 2011.

February 3, 2012

Halifax is to offer 90% LTV mortgages on new-build houses, increasing its maximum LTV on this type of property from a previous cap of 80%.

The new rates are available only through Halifax for Intermediaries and on houses built by selected developers, including Barratts, Permission Homes and Taylor Wimpey.

February 3, 2012

Santander’s gross mortgage lending for 2011 totalled £23.7bn, 2% lower than the £24.2bn it lent in 2010.

The bank’s market share of gross mortgage lending was 17.3% in 2011, down slightly from 17.7% in 2010.

Santander’s average loan to value was 65% on new mortgage loans in 2011 and the average loan-to-value on its book was 52%.

February 3, 2012

India’s largest lender, State Bank of India (SBI), is set to enter the UK residential mortgage market in August.

SBI is the world’s 50^th largest bank and is 59.41% owned by the Indian government. They have been operating in the UK for nearly 90 years and have ten branches.

Ranjnish Kumar, head of State Bank of India UK, told the Financial Times that the financial crisis and subsequent increase in banking sector regulation had provided an opportunity for smaller banks.

February 5, 2012

The owners of up to 200,000 flood-risk homes could face difficulties getting insurance, the Association of British Insurers (ABI) has warned.

A deal between the insurance industry and the Government, for insurers to provide cover to at-risk properties in exchange for investment in flood defences is due to expire in June 2013.

According to the ABI, Boston, Skegness and the Vale of Clwyd have nearly 15,000 homes with a high risk of flooding.

Director General Otto Thoresen is quoted as saying: “We are frustrated with the progress of our talks with the Government on the issue; we want it to look urgently at a mode that would allow flood cover to remain widely available and competitively priced.”

Securing a mortgage in an area at risk of flooding is a reasonably simple process. The mortgage lender must be happy with the type of insurance the property has and they some times look at the level of excess. They will also pay particular attention to the valuation report.

February 3, 2012

Principality Building Society reported gross mortgage lending of £1bn for 2011, a 6.5% increase on the previous year. The lender made a pre-tax profit of £24.5m for 2011, down 20.5% on its profit of £30.8m for 2010.

February 3, 2012