The average Briton has "overpaid" their mortgage arrangement by £3,000 since the recession began in 2007. Despite the fact that many in the UK are now struggling to make ends meet on a monthly basis it seems as though many took a sensible approach as they saw the hard financial times approaching. Ever increasing concern about the security of jobs in the UK, at least in the short-term, would appear to be a major factor in all the over-payment of mortgages but there are hopes that job security will improve during the 2010.
Estate agents up and down the UK have confirmed that the UK government's recent stamp duty reduction has prompted a significant boost in first-time buyer activity within the UK property market. While there is still some confusion regarding the conditions of the stamp duty holiday for first-time buyers there is no doubt it has caught the eye of would-be buyers in the short-term.
The Bank of England has forecast an increase in the number of deals requiring relatively small deposits which should bring more first-time buyers into the UK property market. This has been one of the major problems over the last few months, the requirement from many mortgage lenders that significant deposits are placed down before any mortgage agreement can be entertained. Whether or not this has reduced buyer interest in the short term is debatable because political and economic factors have also come into play.
The Bank of England has confirmed that UK mortgage approval numbers fell in February to 47,094, well down on the six-month average of 55,130 and also down on the 48,099 approved in January. While this is obviously a bitter blow to the UK property market, when you consider the forthcoming general election and the doom and gloom surrounding the UK economy at the turn of the year, it is perhaps understandable that many people have put off what would be the biggest investment of their lives.
Over the last few months there has been a concerted campaign to rid the UK mortgage market of so-called "liar's loans" which are in effect self certified mortgages. These are mortgages taken out predominately by the self-employed, who may have income which is difficult to predict. In simple terms they effectively self certify a mortgage agreement by guaranteeing that the income information which they are presenting to the bank or other financial institution is correct and they can afford the repayments in question.
The FSA (Financial Services Authority) has today experienced a significant backlash from the financial community amid calls to ban 100% mortgages and also force mortgage companies to investigate self certified mortgages, to ensure income is there to support the loans. While there is no doubt that 100% mortgages have played a significant role in the downturn of the UK property market, they have also played a significant role in the upturn we have seen over the last decade.
Last week's revelation that Bradford & Bingley lost £196 million as a consequence of buy to let fraud and bad debt has prompted a number of questions regarding mortgage fraud in the UK. It appears that mortgage fraud has been increasing over the last couple of years although is this the real picture?
In a move which will catch the eye of many consumers in the UK Lloyds bank has revealed customers on variable mortgage rates will be able to overpay up to 20% of their outstanding mortgage loans over the next year. The idea is that more people could take the opportunity to benefit from low UK mortgage rates and effectively reduce their interest payments in the future. It is believed that up to £20 billion in additional finance charges has been saved by UK homeowners who have overpaid their mortgages in the last 12 months.
It has been revealed that 32% of mortgage holders in Edinburgh than 24% of those in Glasgow have been overpaying their mortgages in an attempt to take advantage of relatively low UK mortgage rates. The report by Lloyds banking group confirms that UK consumers are taking heed of the economic downturn and the resulting low interest rates which have impacted upon a number of financial markets.
Despite high hopes that the UK property sector was indeed returning to growth, these hopes were dashed in January with news of a 49% reduction in the number of home loans issued in the UK. It would appear that the stamp duty holiday introduced by the government in 2009, which ended in December 2009, led to a surge in property acquisitions towards the end of 2009. After the stamp duty holiday ended it seems that property buyers in the UK have abandoned the market, at least in the short term.
