The National Association of Estate Agents (NAEA) said [...]]]> First time buyers are “rarely seen”, estate agents warn with their share of the UK housing market having fallen to a three year low.Sales to those buying their first home fell from a 22% share of the market in September to a 16% share in October, figures suggest.

The National Association of Estate Agents (NAEA) said this was the lowest proportion since December 2008.

One economic research company has also scaled back its price growth forecast.

The level of sales and homes going on the market in the UK was little changed in October compared with September, according to the NAEA.

However, it said that first time buyers had suffered a “heavy blow” to their share of the overall housing market.

The association said that, despite some evidence of mortgages being approved by banks, there remained significant lending barriers for those trying to buy their first home.

“The first time buyer is rarely seen as they struggle to get mortgages and over-optimistic vendors with a lack of motivation continue to stifle certain areas of the market,” said Martyn Baum, who represents the NAEA in the Midlands.

It still believes that house prices will rise from next year.

The research company also said that the government’s housing strategy could initially push up prices slightly but would have no effect on values after the first year.

That figure represented a [...]]]> Mortgage lending in Scotland rose in the third quarter – but at a much lower rate than the UK as a whole, according to the latest data released by mortgage lenders.The Council of Mortgage Lenders (CML) Scotland said 12,400 loans were taken out, which was 900 more than in the previous quarter.

That figure represented a rise of 8% for the period.

In the UK as a whole, lending for house purchase increased by 16%.

Loans to first time buyers and home movers in Scotland increased in the third quarter.

A total of 4,600 loans worth £429 million were advanced to first time buyers, which was a rise of 7% by volume and 10% by value.

CML Scotland said there were “small improvements” in lending criteria for all Scottish house purchasers in the quarter.

First time buyers typically borrowed 80% of their property’s value, up from 79% in the second quarter – bringing the average loan-to-value ratio in Scotland in line with the UK average.

Home movers borrowed on average slightly less of their property’s value from July to September than April to June – 70% compared to 71% – but they spent 8.8% of their income on mortgage interest payments, the lowest since records began in 2005.

A total of 9,600 remortgage loans worth £900 million were taken out, a 5% increase on the previous quarter.

CML Scotland policy consultant Kennedy Foster said: “The mortgage market in Scotland is currently stable, albeit at a low level.

“We anticipate growth is likely to remain slow going forward, although welcome developments – such as smaller deposits – have emerged and a Scottish mortgage indemnity scheme for new-build properties is being introduced.

“The uncertain economic outlook and low levels of consumer confidence will likely result in a continuing constrained mortgage market in Scotland, as in the UK in general.”

The number of mortgages taken out for house purchases was 48,200 in September, down 2% from the month [...]]]> Economic uncertainty makes the future of the UK mortgage market “difficult to call”, a mortgage lenders’ group has said.Paul Smee, director general of the Council of Mortgage Lenders (CML), said the market for home loans was currently stable.

The number of mortgages taken out for house purchases was 48,200 in September, down 2% from the month before, the CML said.

First time buyers needed an average deposit of 20% of a home’s value.

The number of mortgages approved for house purchases was 3% higher than in September 2010.

However, mortgage lenders have suggested that the cost of loans has started to rise because banks are charging more to lend to each other.

The rising cost has resulted from banks’ confidence in lending to each other being knocked by the eurozone crisis, and Mr Smee said this made the future for the mortgage market more difficult to predict.

“Although both house purchase and remortgage loans experienced a small drop in September the overall market to date shows a stable picture,” said Mr Smee.

“However, the backdrop of global and domestic instability makes the future more difficult to call.”

Over the third quarter of the year, the number of home loans advanced for house purchases was up 16% compared with the previous quarter at 144,200.

This was 6% lower than the number in the same period in 2010.

The number of homeowners remortgaging in the third quarter was up 23% on the same three months in 2010.

However, the latest figures show the steam might have come out of the remortgaging market, with the number of remortgaging loans approved in September down slightly on the previous month.

The number of loans taken out by first-time buyers rose slightly in September from a low base.

The level of deposit required remained unchanged compared with August, but had eased compared with a year earlier.

This increase follows a rise in the rate at which banks lend to each other – Libor – which has been [...]]]> Mortgage interest rates could start to rise again as a result of the turmoil in the eurozone brokers are warning.Some lenders, including Woolwich, Halifax and Santander, have pushed up their tracker rates for new borrowers.

This increase follows a rise in the rate at which banks lend to each other – Libor – which has been inching higher amid worries over the eurozone crisis.

The increase in Libor indicates that banks are less confident about lending to each other.

Although the average tracker rate has hardly altered since the summer, there are straws in the wind which suggest that the direction could be shifting from down to up.

On Wednesday, the Chelsea Building Society put up the cost of some of its most competitive tracker mortgages by 0.2%.

In recent weeks, the Halifax raised its two-year tracker by 0.15% to 3.34%, while Woolwich increased the rate its trackers revert to after two years by 0.4%.

Santander pushed up its Abbey-branded lifetime tracker in two moves from 2.95% to 3.09%. Nationwide and ING have also raised some rates as well.

One indication of the pressure on lenders comes from Libor – the London Interbank Offered Rate – the short-term interest rate at which banks will provide funds to each other.

While some lenders draw mostly on their customers’ savings to fund mortgages, others have to borrow large amounts on the money markets, hence the importance of rates such as Libor.

Since August, three month sterling Libor has risen from 0.83% to 1%.

This is a significant change compared with the Bank of England’s key rate, which has been stuck firmly at 0.5% since March 2009. On Thursday, the Bank said it would keep rates on hold again following the latest meeting of the Monetary Policy Committee.

The figures suggest that this year’s modest revival in sales has ended and that mortgage [...]]]> The number of new mortgages approved for home buyers, but not yet lent, fell in September for the first time in five months.The Bank of England said approvals for home buyers were 50,967 in September, down 1,380 or 3% from August.

The figures suggest that this year’s modest revival in sales has ended and that mortgage related sales may fall again in the coming months.

In September, completed sales fell for the second month in a row, to 72,000.

The figures from HM Revenue & Customs (HMRC) showed that sales last month had fallen by 11,000 from the July peak of 83,000.

Prices are likely to trend down over the coming months in the face of very low consumer confidence amid persistently weak economic activity, markedly rising unemployment and muted earnings growth.

The number of first-time buyers, at 18,200, fell back by [...]]]> The number of mortgages lent in July was still much lower than a year ago, figures from the Council of Mortgage Lenders show.The number of new loans to house buyers was 48,400 in July, up 1,000 from June but still 6,900 lower than a year ago.

The number of first-time buyers, at 18,200, fell back by just 300 from June and was 1,300 down on a year ago.

First-time buyers are still having to put down deposits averaging 20% of their purchase price to obtain a loan.

“August saw global financial turmoil and unrest closer to home and recent Bank of England approvals figures do not necessarily suggest a continuing upturn in lending in coming months,” said the CML’s director general Paul Smee.

“However, it is likely that this reflects weak consumer appetite for borrowing, more than any additional constraints on the availability of mortgages,” he said.

Figures from the Bank of England showed that in July 49,239 new mortgages were approved, but not yet lent, to house buyers. That represented the third monthly increase in a row and would normally suggest an impending upturn in sales.

With house prices rising slightly so far this year, the average new mortgage has gone back up to £120,000, the CML said.

As a result, the total amount of money involved in the new loans in July rose to £7.3bn from £6.9bn in June, putting gross lending at its highest level since August last year.

Mortgage rationing in the past few years has led to home sales [...]]]> The number of mortgage deals available has returned to the level of early 2008, before the banking crisis reached its peak.Of the 2,557 mortgage types on offer, 64% require at least a 20% deposit and only 2% need a deposit of 5% or less.

Mortgage rationing in the past few years has led to home sales falling by more than half.

Moneyfacts, which compiled the figures, said lending to people with small deposits was still very restricted.

“While the number of deals for borrowers with a 5% deposit or less has increased, the majority require a guarantor to qualify or are from lenders which offer restricted lending,” said Michelle Slade of Moneyfacts.

“First-time buyers still really need at least a 10% deposit before they can find any real mortgage options.”

She said lenders were worried about borrowers defaulting if interest rates rose, and were concentrating their lending on people who could put down at least a 25% deposit.

Severe mortgage rationing has been in place since 2008, when banks and building societies decided to restrict their lending because of the financial crisis.

The knock-on effect has been that people who would normally be regarded as highly creditworthy have been having problems obtaining a loan to buy a home.

Despite a clean credit history, several lenders are rejecting home loan applications.

As a result the mortgage decision making  process is getting slower and slower. Previously mortgages were agreed in six days or so now the process can take up to three months.

The CML has predicted that a total of [...]]]> Low interest rates have kept the level of UK mortgage arrears and home repossessions steady according to the Council of Mortgage Lenders (CML).A total of 9,000 homes were repossessed in the second quarter of the year – 100 fewer than in the previous three months, the CML said.

The CML has predicted that a total of 40,000 people will lose their homes this year, up from 36,300 in 2010.

It said its view remained unchanged despite turbulence in the markets.

The Bank of England has held its Bank rate at 0.5% – a record low – for more than two years.

This has assisted mortgage holders who may have faced difficulty in keeping up with their monthly payments otherwise during a period out of work or as they face other financial pressures, such as rising energy bills.

The total number of mortgages in arrears was broadly unchanged in the second quarter of the year, the CML figures show.

The number of mortgages in arrears of between 1.5% and 2.5% of the outstanding balance edged up from 77,800 in the first three months of the year to 78,500 in the second quarter.

Those in arrears of more than 2.5% of the balance declined from 166,700 to 164,500 over the same period.

The number of householders who have lost their homes owing to mortgage payment difficulties was 7% lower in the first half of 2011 compared with the first half of 2010, and 28% down on the first half of 2009.

“Mortgage repayment problems have stabilised against a current backdrop of stable employment and low interest rates,” said CML director general Paul Smee.

The CML has predicted that the number of repossessed homes will rise to 45,000 in 2012.

“Despite current uncertainty in financial markets, we see no need to revise our forecasts. Anyone with debt worries should take advice and speak to their lender at the earliest opportunity, as most temporary financial problems can be resolved,” Mr Smee said.

Debt advisers said the continued willingness by banks to show leniency to people struggling to meet their mortgage payments had helped to keep the numbers of repossessions down.

And in June, Bank of England governor Sir Mervyn King said that when there was an increase in the Bank rate, there would be a delay in it feeding through to other borrowing costs.

Housing Minister Grant Shapps said: “The worst thing anyone struggling to pay their mortgage can do is bury their heads in the sand hoping the problem will go away. No one in financial difficulty should be embarrassed to seek help if they need it.”

The financial information service said that availability was rising for those offering a deposit of just 10%.

But [...]]]> The number of different mortgage products available in the UK market has risen to the highest level since November 2008, figures show.The increased competition has contributed to falls in the interest rates for new mortgage deals, according to Moneyfacts.

The financial information service said that availability was rising for those offering a deposit of just 10%.

But there has been no return of the pre-banking crisis deposit-free deals.

Only a handful of mortgages remain on the market for those offering a deposit of less than 10%, and they often have other restrictions attached.

However, there has been a rise in the number of mortgage products at the 10% deposit level, from 176 a year ago to 261 at the start of July.

However, banks remain strict about who they lend to – such as checking applicants’ credit history.

The largest category of a total of 808 mortgage products still require a deposit of 25%.

The increased availability has created more competition which has helped reduce the cost of home loans.

A week ago, Moneyfacts reported that interest rates on new mortgage deals had fallen to their lowest level, on average, in 23 years.

The average two-year fixed rate deal were at 4.32%, three-year fixed deals now averaged 4.92%, five-year fixes were at 5.29% and the average two-year tracker deal was now at 3.37%, it said.

New mortgages approved for house purchase, but not yet lent, rose to 45,940 in May from 45,447 in April.

Despite the slight increase, May’s approval figure was lower than [...]]]> Mortgage approvals are still subdued new figures from the Bank of England suggest.Which means that the UK property market is set to remain subdued in the forthcoming months.

New mortgages approved for house purchase, but not yet lent, rose to 45,940 in May from 45,447 in April.

Despite the slight increase, May’s approval figure was lower than the average for the previous six months.

The data suggests that house sales, which have been running at half their pre-2007 levels, will also stay low in the coming months.

Meanwhile, building societies have complained again that National Savings & Investments (NS&I) is being too agressive in trying to attract savers’ money.

NS&I recently relaunched its inflation-proofed investment policies.

The Building Societies’ Association (BSA) said this had contributed to another outflow of funds from its members in May, of £613m.

This has been due to the expectation that the Bank of England is unlikely to raise its bank rate above [...]]]> Interest rates on new mortgage deals have fallen to their lowest level for 23 years since 1988, according to new research.
This is due to lenders finding it cheaper to raise funds in the wholesale financial markets.

This has been due to the expectation that the Bank of England is unlikely to raise its bank rate above 0.5% anytime soon.

However most mortgage deals still require buyers to put down at least a 20% deposit.

The intra bank swaps rate determines the cost of borrowing for banks and building societies when they want to borrow longer term money in the financial markets at a fixed rate to lend onto their customers.

The market provides an indication of when banks expect the Bank of England to raise short term interest rates.

Until recently, a rate rise had been expected as soon as September.

But following a set of weak economic data, as well as the decision by a new member of the Bank’s rate setting committee to vote for no change in rates, markets now do not expect a rate rise until well into next year.

According to Moneyfacts, the average two-year fixed rate deal is now at 4.32%, three year fixed deals now average 4.92%, five-year fixes are at 5.29% and the average two-year tracker deal is now at 3.37%.

Interest [...]]]> The interest rates charged on fixed rate mortgages fell to a record low during May as lenders passed on reductions in their own funding costs to borrowers.
The average cost of a two year fixed rate deal dropped for the third consecutive month, falling by 0.19% to stand at 3.47%, according to the Bank of England.

Interest charged on tracker mortgages remained at their record low of 3.45%, while there was also a fall in the cost of five year fixed rate deals, with the cost of these now averaging 5%.

The downward momentum on mortgage rates appears to have continued into June, with a flurry of lenders slashing their rates during the past few days, including big names, such as Halifax, Nationwide, Lloyds TSB and NatWest.

The reduction in the price of fixed rate mortgages is being driven by a fall in swap rates, upon which the deals are partially based, as the Bank of England’s Monetary Policy Committee is widely expected to put off raising the base rate until the final quarter of this year.

There has also been a further improvement in the number of mortgages available to people with only small deposits, with 31 different loans now available for people with 5% to put down, up from 24 at the start of the year and the highest level since December 2008.

Choice for people with deposits of 10% has also risen to 244 from 199 during the same period, while there are now 545 mortgages available for those borrowing 85% of their home’s value, compared with 480 at the start of the year.

Mortgage rationing which has depressed UK property sales will stay in force until at least the end of [...]]]> House repossessions are likely to rise again next year the Council of Mortgage lenders (CML) has warned.
In its updated outlook for the property market, it says repossessions will probably rise from 40,000 this year to 45,000 in 2012.

Mortgage rationing which has depressed UK property sales will stay in force until at least the end of 2012 the CML says.

Sales this year will be even lower than it first thought, at 840,000, however they will recover next year to 900,000, a level last seen in 2008, the CML predicts.

But lenders will remain cautious about the size of loans they are willing to offer to home buyers.

“The aftermath of the global financial crisis continues to have a pronounced impact on mortgage and housing markets,” the CML said.

“Property transactions look set to remain at the low levels of the past few years. Lenders will continue to have only a modest risk appetite, and this will limit lending at high loan to value ratios,” the CML added.

Describing the UK as going through “a weak and patchy recovery”, the CML forecasts that:

• interest rates will probably stay at 0.5% for most of this year, rising only modestly in 2012.
• the number of borrowers classified as in arrears will rise to 180,000 this year, as originally forecast, and stay there in 2012.
• the number of homes repossessed will, as previously forecast, rise from 36,000 in 2010 to 40,000 this year, but will rise further next year to 45,000.

If this last forecast is borne out, it will take the annual number of homes being repossessed close to the total recorded in 2009.

But that will still be considerably fewer than the number seized by lenders during the recession of the early 1990s, when repossessions reached a peak of 75,500 in 1991.

“Despite the pressure on household finances, we expect the vast majority of households to keep up with their mortgage payments, helped by a relatively gentle trajectory for interest rates,” the CML added.

The CML’s latest forecast points out that demand from would be borrowers has been subdued in recent months because of the current squeeze on household finances, and the uncertain economic situation.

This is despite the [...]]]> UK interest rates have been kept at the record low of 0.5% again by the Bank of England’s Monetary Policy Committee.
Data this week pointed to a slowdown in growth in manufacturing, construction and services, which economists took as a sign that the Bank would not change rates with the recovery still weak.

This is despite the fact that inflation is currently at 4%, double the Bank’s target rate.

The MPC did not reveal any new quantitative easing measures either.

The Bank has faced a difficult choice – either keep interest rates low to try to aid the economic recovery, or raise them to try to cool inflation.

Raising interest rates takes demand out of the economy and slows down inflation, but it also increases the cost of borrowing, and there are concerns this may tip the UK back into recession.

The economy shrank by 0.5% at the end of last year, but returned to growth in the first three months of 2011, expanding by 0.5%.

Although the Bank was widely expected to leave rates unchanged, some members of the committee have been pushing for an increase.

However, this was still 10% fewer than in March 2010 and suggests that activity in the coming months will remain [...]]]> Mortgage lending by the UK’s main banks is still very subdued claims the British Bankers’ Association (BBA).
The number of new mortgages approved by its members for house purchase rose by just 1,482 in March to 31,660.

However, this was still 10% fewer than in March 2010 and suggests that activity in the coming months will remain depressed.

The BBA said worries about the economy were depressing all forms of bank lending.

“Weak trading activity is discouraging businesses from borrowing to expand and most are oriented towards repaying debt and reducing their operating costs,” said the BBA’s statistics director, David Dooks.

“Householders also remain focused on paying down debt, leading to a net contraction of unsecured borrowing and low net mortgage lending, although new mortgage lending is holding up fairly well,” he added.

The BBA explained that unsecured lending by its members – such as on credit cards, overdrafts and bank loans – had been flat in March, with no increase in the amount outstanding.

“Demand for unsecured borrowing remains subdued, despite stronger reported retail sale volumes in March, suggesting that cash, not credit, is being used for spending,” the BBA said.

Recent surveys have shown that house prices have changed very little in [...]]]> Mortgage lending is still running at very low levels according to the Council of Mortgage Lenders (CML).
There were just 32,300 mortgages arranged with house buyers in February – 8% more than in January but still 12% down on the same month a year ago.

Recent surveys have shown that house prices have changed very little in the past six months.

The CML said that cash sales, now accounting for about 40% of all sales, were helping to prop up the market.

“The February fall in lending compared to last year was despite the fact that lending in the early months of 2010 was itself depressed following the end of the earlier stamp-duty concession,” said the CML’s chief economist Bob Pannell.

“But research suggests cash purchases have remained steady since the credit crunch, indicating that the housing market may be holding up better than the low mortgage lending levels suggest.”

New research showed that UK interest rates offered on relatively short-term fixed-rate bonds have been rising since August 2010.

However, they have been increasing from an all-time low of 2.52% for a one-year bond.

The movement signals an expectation of a [...]]]> Savers and borrowers could benefit by locking in the best interest rates for more than a year.

New research showed that UK interest rates offered on relatively short-term fixed-rate bonds have been rising since August 2010.

However, they have been increasing from an all-time low of 2.52% for a one-year bond.

The movement signals an expectation of a Bank rate rise in the coming months.

Moneyfacts said that the average interest rate for a one-year fixed-rate bond was now 2.85%, the highest since March 2010.

For a two-year bond, savers receive an average of 3.42%. Tying in money for three years garners an average rate of 3.7%, and when investing for five years the average interest rate is 4.17%.

“The biggest increase in rates is on short-term deals, which are the most popular amongst savers,” said Michelle Slade, of Moneyfacts.

“Most of the best deals are from smaller building societies. If savers want to make the most of their money they may need to look further afield than their local High Street.

“The markets expect a rise in Bank base rate in the not too distant future and this is being factored in to the rates being offered to savers.”

However, she warned savers that they would receive a hefty penalty if they needed access to their funds during the fixed-rate period, and so they should consider their financial situation before committing.

This is [...]]]> Northern Rock has announced that it is to  start offering again mortgages of up to 90% of a property’s value for the first time since it was nationalised.
It is to start offering a two year fixed rate home loan at 5.99%, a three year loan at 6.49% and a five year loan at 6.59%.

This is not the cheapest on the market, but the bank said these products were designed to appeal to potential first time buyers unable to raise a large deposit.

Prior to nationalisation, the lender was criticised for offering it’s Together mortgages, which allowed customers to borrow up to 125% of the value of a property.

Recent figures on prospective mortgage lending suggest there will be little pick up in activity in the coming months.

However, these actions strengthen the conclusions drawn from property professionals which have shown that the start of 2011 has been sluggish for the housing market.

The number of properties sold in England and Wales was lower towards the end of 2010 than during the same period a year earlier.