A recent promise by Northern Rock to introduce a reduced mortgage fee from yesterday has been withdrawn in the short term due to "technical difficulties". The company recently announced that the previous £250 fee would be reduced to £99 in an attempt to attract more business to the government, and taxpayer, owned operation.
Mortgage lending in the UK is down a staggering 18.5% when you compare July 2010 against July 2009. The number of mortgages confirmed in July fell to 33,698 against 41,000 in July 2009 which is a very worrying fall. So what is going on with the UK housing market?
A report from the renowned Policy Exchange think tank, which we covered yesterday, has caught the attention of many consumers across the UK. The report suggests that UK base rates could increase to around 8% by 2012 as the Bank of England looks to fight off the potential threat of inflation. However, a by-product of this potential increase in UK base rates could be an average £900 a year increase in mortgage payments.
A survey by Halifax today casts a very different light on the UK property sector with regards to first-time buyers specially. The reports suggest that 94% of first-time buyers were not required to pay stamp duty on their purchases between January 2010 and June 2010. A number of first-time buyers confirmed this was a major factor in their ability to climb onto the property ladder with the Halifax also showing that 80% of first-time mortgage applications were approved - something which seems to be very out of sync with the rest of the sector.
As a number of first-time buyers opt for the rental market in the short to medium term, to give them time to build up a substantial deposit, it would appear that their finances are being squeezed. It is being reported today that landlords across the UK have increased rental charges for the sixth consecutive month which would appear to indicate more and more people are opting to rent properties rather than buying at the moment.
A report by the Council of Mortgage Lenders in the UK has today confirmed that mortgage lending has risen for the third month in a row despite the fact that the UK property market is going through something of a difficult patch. Over £13 billion was made available to the UK mortgage market in July, which was a 5% increase from the previous month, although this figure is around 4% down on the corresponding period last year. So is this a change in bank lending and mortgage lending?
The UK Post Office, looking to extend its financial services division, has today launched a new mortgage with a fixed rate of 2.85% for two years. It will now be possible to borrow 65% of the value of your home at the new rate although there is a £1495 arrangement fee to consider. However, the 0.8% reduction in the interest rate charged on a two year fixed term is very competitive and should attract the attention of others in the marketplace.
It has been revealed that a great number of mortgage providers in the UK are rejecting low deposit applications with some estimating as many as 90% of such applications are turned down. Despite the fact that the industry would like us to believe competition in the mortgage market is on the increase and first-time buyers are now coming back to the fore, it seems very much to be the opposite. So when will the market turn for first time buyers?
The coalition government is this week under enormous pressure to revisit the recent reduction in mortgage benefit payments which has allowed many people to maintain payments after redundancy. The government has effectively halved the mortgage benefit payments available under the previous Labour government, a move which has potentially dire consequences for those in financial trouble.
When you consider UK mortgage rates are relatively low compared to historic levels it is a little surprising to see that remortgages in June were down 20% on the same period last year. Many experts believe that the reduction in UK property prices, pressure on household budgets and unemployment have come together at a most inopportune moment.
