House prices continue to slide in November with property website Rightmove reporting that sellers have cut prices by 3.2%, resulting in "the biggest monthly drop since December 2007". As Government spending cuts and tax rises become imminent, the future housing market looks bleak as many sellers adopt a 'wait and see approach'.
Mortgage lending in the UK fell to £12 billion in September which is the lowest September figure since back in 2000. It is also a 1% reduction from the August figure and a 7% reduction on the same period in 2009, which again illustrates the difficult situation for the UK mortgage market, UK property market and UK homebuyers.
The US banking sector has today fallen on concerns that companies such as Bank of America may be forced to buy back mortgages which were the subject of recent foreclosures. As we mentioned in one of our earlier articles, the US authorities have launched an investigation into the foreclosures market amid concerns that legal procedures and property documents were not reviewed correctly and some foreclosures may well turn out to be illegal.
Tesco, the leading UK supermarket group, has confirmed plans to enter the UK mortgage market in the first quarter of 2011 have now been delayed until the summer of 2011. It seems that a number of regulatory issues and the company's inability to put together a transparent and user-friendly mortgage operation have forced the slight delay. The company is adamant that the new service will be more transparent than anything on the market at the moment and more user-friendly. If this is the case, then a wait of just a few months may well be worth the wait for UK house buyers?
Despite the fact that the credit crunch began in the US, and appears wholly to have occurred as a consequence of high-risk US mortgage lending, there is no doubt that the UK mortgage industry played more than a passing role in the collapse of the UK property sector. While the FSA (Financial Services Authority) is being accused of "throwing out the baby with the bathwater" there is no doubt that element such as buy to let mortgages and self certified mortgages played a major role in the collapse of the UK property sector.
The Financial Services Authority (FSA) seems determined to push through major changes in the UK mortgage industry which would reduce the perceived risk for mortgage lenders. However, despite the fact that the majority of interest only mortgage holders have had no problem covering their monthly interest payments and final capital repayments it seems that the FSA is determined to stamp out interest only mortgages in the future. So will this really happen?
The Council of Mortgage Lenders (CML) has today hit back at new mortgage regulations proposed by the Financial Services Authority (FSA). The CML believes that around half of mortgage arrangements approved between 2005 and 2009 would not have happened under the proposed new regulations even though the vast majority of the people in question have had no difficulty keeping up with their mortgage repayments.
This week we heard news that UK mortgage holders have repaid £6.2 billion worth of mortgage liabilities in August although many are now asking the question, where is this additional mortgage liquidity now?
During the period between April 2010 and June 2010 the Bank of England revealed that UK homeowners repaid £6.2 billion of outstanding mortgage liabilities. This is the largest injection of cash back into the UK mortgage arena since the first quarter of 2009 and would seem to indicate that UK taxpayers are more concerned with repaying their debts at the moment than taking out further liquidity. So why are UK taxpayers turning ultra-cautious?
Today is D-Day for many people in the UK who have lost their jobs and are fighting to retain their homes, with the UK government slashing its share of interest paid on mortgages from 6.08% to the market average of just 3.63%. This is a controversial move designed to save the UK government billions of pounds and reduce the budget deficit. However, as you might expect the scheme has attracted more than its fair share of criticism with the potential to place hundreds of thousands of families on the homeless list. So was the government right to reduce support for scheme?
