UK banks such as HSBC, Barclays and Royal Bank of Scotland are amongst 15 banks facing a lawsuit from US-based Cambridge Place Investment Partners in what could become a very influential test case. The UK giants are joined by JP Morgan, Citigroup, Credit Suisse, Deutsche Bank, Merrill Lynch, UBS, Goldman Sachs and Morgan Stanley, all facing claims that they mis-sold around £1.6 billion of mortgage-backed securities.
This week's announcement that the MPC decided to maintain UK base rates at 0.5%, for the 17th month in a row, was not really a surprise for economists in the UK. Indeed many economists believe that UK base rates will remain at the current level until at least the second half of 2011 and possibly beyond if the UK economy does not show signs of growth over the next 12 months. So is now the time to review your mortgage arrangements?
As the UK mortgage industry breathes another sigh of relief that UK base rates remain fixed at 0.5% after this week's MPC meeting, there is confusion as to why mortgage rates have not fallen further in recent weeks. The truth is that base rates, while having historically played a prominent role in the mortgage arena, are now playing a lesser role due to the state of the worldwide money markets. We are simply down to a situation of supply and demand in the money markets, with very little liquidity and growing demand pushing interest rates higher and higher.
As UK base rates remain unchanged at 0.5% after yesterday's MPC meeting many people are now asking how this will impact upon the UK mortgage market. Will mortgage rates remain low? Will they move higher? What other factors will impact upon mortgage rates in the UK?
There are growing concerns that competition in the UK mortgage market may well have peaked in the short-term and remortgaging could become more difficult in the latter part of 2010. Slowly but surely we appear to be slipping back towards a liquidity crisis in the mortgage market which has been brought on by the debt crisis in Europe, the UK economic situation and the UK governments move to reduce the public-sector budget and increase taxes. So are we on the verge of a mortgage liquidity crisis?
A survey by the Bank of England has today cast a shadow over the third quarter and latter part of 2010 with UK banks on the whole expecting a decline in mortgage approvals. Many believe that we will see a tightening of the fiscal environment in UK in the short-term, something which could well continue into 2011 unless the UK economy shows signs of improvement. Should we be alarmed?
The Bank of England has today issued a report confirming that mortgage defaults and loan defaults from the business arena are continuing to fall, following the trend in the mortgage market which began last year. The latest report covers the period from April 2010 to June 2010 and has proven to be very encouraging in relation to the UK economic situation. However, what can we expect in the future?
Despite the fact that the UK property market is still struggling to pull away from the after effects of the recession there are still a number of very attractive mortgage deals available. The popular press has made much mention of growing competition in the mortgage industry although it can be difficult to find a deal which best suits your situation and your requirements. It may take some time, it may not be easy but the increase in competition in the sector is starting to pay dividends again for house buyers.
The British Bankers Association (BBA) has today confirmed that May saw an increase in mortgage approvals compared to April and March. When you consider that members of the BBA account for around 75% of new mortgages in the UK the indication is that UK mortgage lending continues to recover. So how will this impact upon the UK property market?
There is no doubt that the UK property market has not performed as well as many had hoped and expected during the first half of 2010, with a number of analysts also expecting weakness in the market in the latter part of 2010. So how many UK mortgages could be at risk in the short to medium term?
