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.

Barclays said it had cut complaints by 14% compared with a year [...]]]> More complaints were made about Barclays than any other banking brand by UK customers in the first half of the year, figures have shown.The bank received 251,563 complaints, with 53% of closed cases upheld in customers’ favour, the Financial Services Authority (FSA) figures show.

Barclays said it had cut complaints by 14% compared with a year earlier.

Other banks high on the list included Lloyds TSB (181,907), Santander (168,888) and NatWest (147,109).

The data pulls together figures released in recent weeks by banks.

Nearly 10,000 complaints were filed every day to financial institutions, with a total of 1.85 million made in the first six months of the year.

The FSA figures showed that, among the most complained-about banking brands, Santander was the most likely of the major brands to deal with cases within eight weeks.

It closed 98% of cases within that timeframe. This compared with 74% at Royal Bank of Scotland, 77% at Lloyds TSB, 86% at NatWest, 89% at Barclays and 90% at HSBC.

Complaints were dominated by those about payment protection insurance (PPI), especially after banks lost their legal challenge on PPI rules in April.

PPI is supposed to cover borrowers’ loan repayments if they fall ill, die, or lose their jobs.

But mis-selling cases led to new rules on how cases should be dealt with, and also created an extra compensation bill running into billions of pounds for the banks.

The FSA’s complaints figures are published relating to banking brands.

Barclays headed the list but said the number of complaints had fallen by 14% compared with the same period a year earlier.

“We want to get it right every time. When we do get it wrong, we apologise, try to correct it quickly and identify how to prevent it from reoccurring,” said Antony Jenkins, chief executive of Barclays Retail and Business Banking.

“We have made good progress in reducing complaints with a substantial and sustainable reduction in banking complaints by nearly a third.”

“However, there is much more to be done and we are working hard to further improve our service to our customers, putting them at the heart of our business and getting it right first time, every time.”

The largest group – Lloyds Banking Group – had most complaints when all its brands were added together.

Some complaints that are unresolved by the banks themselves end up with the independent Financial Ombudsman Service. It recently said that the largest number of these complaints, in the first half of the year, also related to Lloyds Banking Group.

It also said that nearly two-thirds of the new complaints made in the six months to the end of June were about PPI.

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 scheme is mainly aimed at the 4m UK homes not heated [...]]]> Households looking to install renewable heating systems are now eligible for up to £1,250 from the government.People who opt for greener methods such as biomass boilers and solar panels can apply to the £15 million Premium Payment fund set up to support 25,000 installations.

The scheme is mainly aimed at the 4m UK homes not heated by mains gas that rely on higher carbon heating methods.

But Friends of the Earth said “disappointing” caveats short-changed a potentially ground-changing scheme.

The scheme to help pay for the installation costs of systems such as air and ground source heat pumps is open for applications from 1 August until March 2012.

Run by the Energy Saving Trust, it will focus mainly on those heating their homes with high carbon and typically more expensive methods such as electric fires and heating oil.

Climate change minister Greg Barker said: “This month starts a new era in home heating because we’re making it more economical for people to go green by providing discounts off the cost of eco heaters.

“This should be great news for people who are reliant on expensive oil or electric heating as the premium payment scheme is really aimed at them.”

“Getting money off an eco heater will not just cut carbon emissions, it will also help create a market in developing, selling and installing kit like solar thermal panels or heat pumps.”

Green heating grants available:

• Ground Source Heat Pump – £1,250 (homes without mains gas)
• Biomass boiler – £950 (homes without mains gas)
• Air source heat pump – £850 (homes without mains gas)
• Solar thermal hot water panels – £300 (all homes)

The Department of Energy and Climate Change says it will closely monitor energy data and performance through additional meters and detailed surveys.

“When people have the kit installed in their homes they really see the benefit,” said Energy Saving Trust chief executive Philip Sellwood.

“Of course there is still more to be learnt about how to get the most out of the technologies – but the more they’re out there in people’s homes, the more they become part of daily life.

“Without a doubt, the main barrier that prevents people from taking the plunge is the up-front capital cost.  This is a great start in overcoming this obstacle.”

The National Audit Office [...]]]> A scheme aimed at preventing people losing their homes in England proved to be below target but above budget new research finds.
The Mortgage Rescue Scheme enabled not for profit housing associations to buy a stake or all of a home and allow the residents to continue living there by renting it back.

The National Audit Office (NAO) said it helped 2,600 households avoid having their homes repossessed. However, the target was 6,000.

The rescues were also supposed to cost a total of £205m, but actually cost more than £240m, the NAO found.

“The scheme has helped fewer than half the number of households expected and each rescue has cost more than three times as much as expected, with overall costs sitting at £240m,” said Margaret Hodge, who chairs the Public Accounts Committee.

“Spending £35m more than planned yet not reaching all those in need does not represent value for money for taxpayers’ investment in this scheme.”

The scheme was launched by the Labour government in 2008, following a surge in the number of homes being repossessed because people were unable to continue with mortgage payments.

The NAO has studied the success of the scheme in England, which was separate from a scheme in Scotland, which started in 2003, and one in Wales.

It found that the DCLG “made the wrong call” when predicting how many people would choose to relinquish ownership of their home and rent it back from a housing association, compared with the numbers who would opt for shared ownership with the housing association.

Some 98.5% of those on the scheme chose to sell their home, whereas the original estimate was that only 15% of people on the scheme would do so.

The report said the DCLG did not have detailed, up-to-date information on its target group and whether they had sufficient equity to share ownership with a housing association.

The department also failed to draw sufficiently on data from the scheme in Scotland.

“The department made assumptions about the level of demand for the Mortgage Rescue Scheme and made the wrong call,” said Amyas Morse, head of the National Audit Office.

“There was more need than expected for more expensive support and less for the relatively low-cost rescue option. Spending more than expected and delivering less means that the department has not provided value for money.”

The figure is 17% higher than the same month a year ago.

Home loans for house [...]]]> There were 33,900 remortgage loans advanced last month – up 16% compared with the previous month, the Council of Mortgage Lenders (CML) say.
Expectations of interest rate increases led to larger numbers of homeowners remortgaging in March, UK lenders say.

The figure is 17% higher than the same month a year ago.

Home loans for house purchases also proved to be more popular, although the lenders’ body said the market remained “subdued”.

The number of home loans was up 24% compared with the previous month. However, it was 17% down on March 2010, and the CML warned against reading too much into one month’s figures.

Remortgaging accounted for 37% of all lending during the first three months, up from 30% during the previous quarter.

The CML said it was likely that this was linked to expectations of an interest rate rise in the coming months, making mortgages more expensive, even if this increase was only small.

The number of home loans made in March to first time buyers was 28% higher than in February, but 17% lower than a year earlier.

Typically, buyers now have to provide a 21% deposit to get on the property ladder for the first time. This is a little less difficult than the 24% typical deposit required a year ago, the CML figures show.

Only 4% of first time buyers now choose an interest only mortgage compared with 30% before the financial crisis, when these loans were much more available from lenders.

There was a 2% drop in gross [...]]]> UK mortgage lending rose in March when the amount lent in home loans rose by 21% compared with the previous month lenders have said.However the increase came after a dip in lending for home loans at the start of the year the Council of Mortgage Lenders (CML) figures show.

There was a 2% drop in gross mortgage lending compared with March 2010, the CML said.

A trend of remortgaging in recent months has continued, it added with gross mortgage lending reaching an estimated £11.3bn in March, the CML said.

However, the big month-on-month rise was the result of particularly low lending of £9.3bn in February.

A three month rolling comparison shows that gross lending for the first quarter of 2011 was £30.1bn, an 11% decline from the fourth quarter of 2010 and a 1% increase on the first three months of 2010.

Lenders expect mortgages to become more available in the coming months, and this could help to underpin house-buying activity, although still at low levels.

Remortgage demand, meanwhile, continues to firm, presumably linked to expectations of higher base rates.

Remortgage approvals in February were the highest for more than two years. Stronger remortgage activity looks set to continue propping up overall lending.

Millions of homeowners will be [...]]]> Mortgage interest rates have been held at a record low for 25 months now- should you fix your rate or stick on a variable rate?
With the Bank of England’s Monetary Policy Committee voting on interest rates many think that it is a question of when, not if, rates will go up.

Millions of homeowners will be affected when they do change- and they have to decide if switching to a fixed rate deal would be a better option.

About 69% of people with mortgages are on variable rates, according to industry figures.

That means many of them, who are enjoying unusually low monthly payments now, could be affected immediately when interest rates do rise.

With predictions that the base rate will be at 2% by the end of 2012, maybe rising to 3% after that.

The biggest benefit of switching to a fixed-rate mortgage is that it gives you peace of mind. You know exactly how much you need to pay each month, and so you can budget accordingly.

However it might not be the cheapest option.

Many companies charge expensive fees for swapping from one mortgage deal to another and the new rates are not always particularly attractive.

So the fixed-rate deal would not save them any money until base rate had gone up several times, to 1.75%.

Home-owners could in fact find it difficult to switch to cheap fixed-rate deals.

The best ones are only available for people who can pay big deposits, or have large chunks of equity in their homes.

Here are some steps you can take to boost your chances of getting the best possible rates.

• The first thing to do is overpay. Reduce the amount you owe as much as possible.

• Check your credit history, make sure there are no mistakes on there.

• Pay any debt you have. So, if you’ve got any debts on your credit card, pay that down first.

Bank of Ireland’s 2009 loss was almost three [...]]]> Bank of Ireland has seen its net loss for 2010 fall to 609m euros, (£544m) after negotiating debt write downs from its bondholders.The results came as a surprise to analysts, who had forecast at least double those losses in line with the wider problems in Dublin’s banking sector.

Bank of Ireland’s 2009 loss was almost three times as high at 1.76bn euros (£1.46 billion).

The bank is currently trying to stay out of total government control- who are the bank’s biggest shareholder with a 36% stake.

If the bank can raise £3.5 billion in the coming months it will be deemed strong enough to stand alone.

The bank is shaping up to be the strongest survivor of the Irish Republic’s banking crisis.

Years of over generous lending, largely for property development, proved unsustainable and led to a 70bn euro support package backed by fellow European partners and the International Monetary Fund.

Its once-bigger rival, Allied Irish Banks (AIB), is so weakened by the Irish banking crisis it is 93% -owned by the Irish state.

Earlier this week, AIB reported a £8.6 billion loss for 2010. It needs to raise £10.8 billion- three times the amount the Bank of Ireland needs.

The Bank of Ireland also recorded nearly £2.1 billion in 2010 losses on its state-ordered sale of property-based loans and assets to the Irish Republic’s so-called “bad bank”, National Asset Management Agency.

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.”

They returned £7 billion in the final three months of the year, [...]]]> UK homeowners paid off more of their mortgage borrowings last year than they had done in any other single year official Bank of England figures show.
Mortgage borrowers paid back more than £24 billion to lenders in 2010, the highest since records began in 1970.

They returned £7 billion in the final three months of the year, a record amount during any quarter since the Bank started collecting the figures.

The figures also include money paid as deposits by homebuyers.

Lenders demanding higher deposits and rationing home loans would also increase the financial stake that homeowners have in their properties.

In the boom, people used extra mortgage borrowing to cover other spending. From July 1998 to March 2008 homeowners borrowed an extra £328bn against the rising value of their homes

This is known as housing equity withdrawal. Homeowners cashed in on the increasing value of their homes to buy cars and holidays.

Now the opposite is happening, as families try to reduce their debts and lenders demand higher mortgage deposits.

Borrowers have also taken advantage of low interest rates to pay back more of their home loans while mortgage costs are low.

There has been an injection of housing equity for 11 quarters in a row, the figures show.

Homeowners have now collectively injected £57.4 billion into their housing equity since the second quarter of 2008, when the trend switched from withdrawal.

Lenders demanding higher deposits has also increased first-time buyers’ financial stake in their homes.

The latest figures show that households spent the equivalent of 2.7% of their post-tax income on reducing their mortgages.

During the boom times, equity withdrawal was providing homeowners with the equivalent of a 9% post-tax boost to their incomes.

Mortgage rationing through demands for higher deposits has contributed to the trend in equity injection.

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.

The Bank of England will monitor whether [...]]]> A long awaited banking agreement with the largest UK banks on lending, pay and bonuses has been announced entitled Merlin.Under Project Merlin, banks will lend about £190bn to businesses this year – including £76bn to small firms – curb bonuses and reveal some salary details of their top earners.

The Bank of England will monitor whether loans targets are being met.

However, Chancellor George Osborne formally ruled out imposing a bonus tax.

Mr Osborne acknowledged that the package would not be enough to assuage public discontent with the banks’ role in the financial crisis, saying: “The anger will remain”.

Treasury sources said that the time had come to move on from “retribution to recovery” – focusing on the lending boost from banks rather than issues over bonuses.

However, groups representing small businesses said that despite the increased lending, they feared the cost of borrowing would remain prohibitively expensive for many firms.

HSBC, Barclays, Royal Bank of Scotland (RBS) and Lloyds Banking Group have signed up to the Project Merlin agreement, while Santander has agreed to the lending parts of the deal.

Other pledges include providing £200m of capital for David Cameron’s Big Society Bank, which is supposed to finance community projects.

However, while banks have also been asked to show restraint in bonus payments, these are expected to total more than £6bn this year.

Banks loaned £179bn to businesses last year and the government wanted a commitment that this would increase.

They are also going to be providing £1bn of risk capital over three years for small businesses in parts of the UK worst hit by spending cuts.

The government said that the measure of whether banks were providing the promised credit to business would be among the performance targets used to determine bonuses of bank chief executives.

The £76bn to be loaned to small business is up 15% from 2010 levels.

However, the provision of credit to UK businesses will be on commercial terms.

Some 80% of those asked were unsure which benefits and allowances they were entitled to.

Others struggled [...]]]> Two thirds of those asked in a UK survey found financial matters too confusing to make the best choices with their money.
The results of the have raised concerns about financial know-how at a time when family budgets are being squeezed.

Some 80% of those asked were unsure which benefits and allowances they were entitled to.

Others struggled to get value for money or understand small print.

More than a quarter of those asked said they struggled to work out how to shop around for the best electricity, gas, mobile phone and television packages.

“Citizens Advice Bureaux are seeing more and more people coming to us for debt advice, and with money worries.

“We know there is a need out there for people to have the skills to manage their cash,” said John Rhodes, head of financial capability at Citizens Advice.

A range of advice organisations have been calling for more financial education in schools.

It is the 10th quarter in a row that homeowners have put more money into their home than they took out.

Collectively, those with [...]]]> Mortgage holders are continuing to pay down their loans, according to the Bank of England’s latest quarterly figures.
Figures for the third quarter of the year show borrowers cut their collective debt by £6.1bn.

It is the 10th quarter in a row that homeowners have put more money into their home than they took out.

Collectively, those with mortgages have been reducing the amount outstanding since the second quarter of 2008 and have paid in £49.7bn since then.

The £6.1bn figure was the net injection of equity that people have put into their homes since the first quarter of 2009.

The recent trend among homeowners to pay down their mortgages contrasts with their behaviour during the housing boom, when they unlocked a record £17.1bn during the last quarter of 2003.

Recent figures from the Council of Mortgage Lenders (CML) showed mortgage lending fell 5% in November compared with the previous month and was down 10% on a year ago, lenders say.

The uncertain housing market means it is more difficult not only to get a mortgage, but to increase the size of an existing one.

In 2010 the property market took a downward turn after a brief recovery in prices that had started in 2009 ran out of steam.

The [...]]]> Re-mortgager asks what will happen to house prices in 2011?
There is quite a divergence of views about whether house prices will fall further, stabilise or even rise during the coming 12 months.

In 2010 the property market took a downward turn after a brief recovery in prices that had started in 2009 ran out of steam.

The severe rationing of mortgages continued and, combined with an influx of would-be sellers, this produced a surplus of sellers over buyers.

The result was that prices started going down again.

Whatever their forecast for prices in 2011, most observers are certain that mortgage borrowing, and completed sales, will stay at their current, very low levels.

One of the biggest factors at play is the continued dearth of mortgage funds.

Lenders continue to be ultra fussy about to whom they will lend, with only the most credit-worthy borrowers – and those with large deposits too – likely to be offered the mortgage they want.

The CML estimates that in 2011, banks and building societies will have to repay about £130bn of the emergency borrowing they took from the Bank of England and the Treasury during the height of the credit crunch.

So the rationing is going to continue, with first-time buyers still being forced to find the cash to put down deposits of between 20% and 25% of the value of the home they are buying.

As a result of this squeeze on the industry’s finances, most lending is now even more concentrated than before, in the hands of just five or six big lenders.

One of those is the Nationwide building society, by far the biggest lender in a sector where most societies are just ticking over.

The Nationwide’s chief economist, Martin Gahbauer, predicts that prices will decline gently for at least the first six months or so of 2011.

“There will be a recovery eventually, but cycles in housing are very long,” he points out.

“Households are still very indebted, the boom was a long boom, and it is not unreasonable to expect a period of digestion to take a long time.”

Some 29,991 of these home loans were approved during the month, the British Bankers’ Association (BBA) said.

The statistics [...]]]> The UK mortgage market has had a slow end to the year, various statistics have shown
The number of mortgages approved for house purchases by the major UK banks fell to a 20-month low in November, figures have shown.

Some 29,991 of these home loans were approved during the month, the British Bankers’ Association (BBA) said.

The statistics offer more evidence that the mortgage market has shown little life towards the end of the year.

The low level of mortgage approvals for house purchases also gives a clue that the number of home loans being taken out in the coming months is likely to remain low.

First time buyers have struggled to secure new loans, as banks retreat to lending to the safest of borrowers.

However, the BBA pointed out that the number of people remortgaging had picked up. There were 27,045 remortgage approvals in November, which was nearly 4,000 higher than the average of the previous six months.

“Remortgaging was strong in November as borrowers chose to replace maturing fixed-term mortgages,” said BBA statistics director David Dooks.