Your Mortgage News

This is the news items from July 2009, kindly provided by YourMortgage.co.uk.

July News

Northern Rock offers remortgages to existing clients 7 Jul 2009

Northern Rock has begun offering remortgage deals at up to 75% LTV to existing customers. Borrowers coming to the end of deals will be allowed to take out new mortgages with the lender if they have at least 25% equity in their homes and meet strict credit quality and affordability criteria.

The bank may consider extending the scheme to customers who need to borrow as much as 90% of the value of their property. A spokesperson for Northern Rock said: "We are approaching select borrowers who meet certain credit criteria which reflect our values of affordability and responsible lending. We may broaden out our criteria in line with these principles."

Market sentiment shows marked improvement 6 Jul 2009

There has been a marked upturn in the number of property investors returning to the market with the amount of new mortgage cases increasing by 41% since January, according to mortgage broker Mortgages for Business. These latest figures support the sentiment that the property market is beginning to bounce back and a more positive outlook is emerging. Commercial mortgage transactions show the healthiest signs of improvement with the number of new cases more than doubling over the first six months of the year.

David Whittaker, managing director of Mortgages for Business, said: "The fact that we've witnessed such a rise in mortgage cases over this six-month period shows that confidence is growing in the market. The buy-to-let sector is particularly competitive and landlords don't want to let any opportunities pass them by as house prices slowly bottom out.

"There are also the first glimpses of a shift in the commercial sector, with enquiries and cases on the increase. This is significant as the commercial property sector has suffered horrendously over the past two years, but, we appear to have turned a corner. With the number of mortgage cases gaining momentum it is clear that banks are open for business and willing to lend, as long as the numbers stack up.

"However, we want to reach the stage where lenders feel secure enough to improve their lending criteria. At that point, overall new mortgage numbers will rise even further and the property market will be heading firmly down the road to recovery."

Fixed-rate mortgages still rising 10 Jul 2009

The cost of fixed-rate mortgages continues to rise, even though swap rates have continued to fall during the past month, according to Moneyfacts. The average two-year fixed-rate mortgage now (July 10) stands at 5.18%, which is just over a half percent higher than 4.67% at the beginning of June.

It means the margin between the average two-year fixed-rate mortgage and swap rates now exceeds a full 3% and stands at 3.15% today. This is after a period where we have witnessed two year swap rates fall from its latest peak of 2.51% on 11 June to only 2.04% on July 10.

Louis Kaszczak, head of Moneyfacts, said: "Fixed-rate mortgages are continuing to be in high demand as any future Bank Base Rate changes should only be an upward movement. "The closer we get to a position where sentiment is stronger that the Bank Base Rate will be going up, the likelihood is that fixed rate deals will follow suit and become even more expensive.

"While the average rates are rising quickly, the good news is that there are still currently 42 two-year fixed-rate deals under 4%. But customers might need to act fast before these better deals get sold out."

Young people optimistic for future 10 Jul 2009

The recession has not affected the financial ambitions of young people compared to two years ago, according to research from Alliance & Leicester. The findings reveal that the average earning expectations of 16-21 year old men is £44,600 in ten years time with the average earning expectations of young women being £34,800.

Young males expect to be earning £10,000 more than their female counterparts expect to earn in 10 years time. More than seven in 10 (71%) of 16 to 21 year olds still expect to get on the property ladder by the time they reach 30, compared to 72% two years ago.

More than 30% expect to be debt free before they are 34 years old compared to 32% two years ago. Over a quarter (27%) believe employers are more interested in experience than qualifications, with 15% believing employers prefer qualifications.

Andy Bayes, head of Abbey and Alliance & Leicester current accounts, said: "With so many young people looking to maintain their financial and lifestyle aspirations during these tough economic conditions, it is essential that those looking to start their career have access to good sources of advice, information and inspiration."

Banks preventing home ownership: NAEA 10 Jul 2009

Banks and building societies are preventing home ownership, according to a poll commissioned by the National Association of Estate Agents (NAEA). The independent survey of 1,800 people found that 58% believed banks must begin lending more if the UK is to pull out of the property slump.

Almost a quarter of people said they were unable to find a mortgage that they qualified for anywhere in the market while 56% believed that a combination of relaxed restrictions and lower deposit requirements would increase the chance of them buying a property.

Peter Bolton King, chief executive of the NAEA, warned that banks risked stifling market recovery and that the Government should pressure them into lending.

He said: "We can not let the banks convince us that shutting up shop when it comes to mortgage lending is a responsible move. The decision to restrict mortgages so severely is rooted in self interest.

"The Government must do more to put pressure on those banks that are refusing to lend, while highlighting those banks that are easing restrictions to help get the economy moving again. It is time to accept that responsible lending to responsible people is necessary for the country."