Rising House Prices See Borrowers Paying Mortgages Off Beyond Retirement

A significant number of borrowers are attempting to stretch mortgage terms to 35 or even forty years, with ‘maximum age at end of term’ the most-searched term by brokers in August. This backs up research which showed a 70% rise in 35 year-plus mortgages over the past two years. This trend for elongated mortgages is potentially a result of rapidly increasing house prices. With higher prices creating affordability issues, some borrowers are looking to spread their mortgage out over a longer time period to lower the monthly repayments. ‘Income multiple used for affordability assessment’, was the second most-searched term in the residential market in August. Read more on the Property Reporter website.

https://www.propertyreporter.co.uk/finance/rising-house-prices-see-growing-number-of-borrowers-paying-mortgages-off-beyond-retirement.html 

First-Time Buyers Offered More Choice Of 90% Mortgages

First-time buyers have more choice of mortgage deals after several banks and building societies this week launched 90% home loans. During much of last year, 90% loan-to-value (LTV) deals requiring a 10% deposit were thin on the ground, but in recent weeks more lenders have stepped back into this market. A three-year fixed-rate 90% deal priced at 3.4% and with a £199 upfront fee has been launched by Nottingham building society. It also rolled out a two-year fix at 85% LTV with a rate of 2.6% that has no fees. Read more on the Guardian website.

https://www.theguardian.com/money/2021/feb/20/uk-first-time-buyers-offered-more-choice-of-90-per-cent-mortgages

Homeless Families ‘Could Save For Mortgage Deposits’

The Conservative mayoral candidate for City Hall has said many of the capital’s 62,000 homeless households in temporary accommodation could save for a mortgage deposit and buy a shared ownership home. Shaun Bailey defended his plans to use housing budgets to build a higher proportion of shared ownership homes – where residents buy a share and rent the remainder – than Sadiq Khan. Mr Bailey has promised to deliver 100,000 affordable homes with his £4bn housing budget if he wins the election in April, with a large proportion of them shared ownership. Read more on Inside Housing.

https://www.insidehousing.co.uk/news/news/homeless-families-could-save-for-mortgage-deposits-says-conservative-candidate-for-london-mayor-69156?utm_source=Housing60&utm_medium=email&utm_content=article_link&utm_campaign=H60

Mortgage Applications Soar After Coronavirus Lockdown Lifted

Mortgage applications soared after lockdown was lifted this summer, reaching an estimated value of £216bn, however the closure of the housing market means lending is expected to be down compared to last year. Pent-up demand and government incentives helped to jolt the UK property market back to life after restrictions were eased following the UK coronavirus lockdown. The latest research showed that mortgage applications were up 13 per cent year on year in July, followed by rises of 25 per cent in both August and September. Read more on the City AM website.

https://www.cityam.com/mortgage-applications-soar-after-coronavirus-lockdown-lifted/ 

Natwest Relaunches 85% LTV Mortgages

NatWest is reintroducing eight new 85% LTV products for purchase and remortgage. Two-year fixed rates start from 1.94% with a £995 fee and £250 cashback or 2.95% with no fee. Five-year fixed rates are available from 2.34% with a £995 fee and £250 cashback or 3.39% fee-free. NatWest says the 85% LTV products are being reintroduced initially through its direct channels, followed by the intermediary channel in the coming weeks. Read more on the Financial Reporter website.

https://www.financialreporter.co.uk/mortgages/natwest-relaunches-85-ltv-mortgages.html

First-Time Buyers Opting For Longer Mortgages

Nearly half of first-time buyers – 45 per cent – picked a mortgage product of 30 years or over in 2018 to 2019, shows the latest English housing survey. Published by the MHCLG, the survey shows that in 2008 to 2009, the proportion of FTBs who opted for a mortgage of this length stood at 33 per cent. Overall, in 2018 to 2019, 19 per cent of mortgages were 30 years or longer in length and in 2008 to 2009, 7 per cent were. MHCLG says that this could be indicative of mortgagors adjusting their monthly costs over time – something renters do not have the luxury of doing. Read more on the Mortgage Strategy website.

https://www.mortgagestrategy.co.uk/news/first-time-buyers-opting-for-longer-mortgages/

One In Ten Reliant On Overdrafts To Pay Their Rent Or Mortgage

Research from comparethemarket.com finds that while most Britons can manage their finances, some are struggling to make ends meet, relying on expensive overdrafts to cover costs. 30% of UK adults have to dip into their overdraft because they have run out of money before the end of the month. Worryingly, one in ten (13%) use their overdraft to cover the cost of their mortgage or rental payments - the equivalent of 1.2 million people. Of these, one fifth (20%) use their overdraft to cover the full payment amount, while a quarter (24%) use it to cover, on average, half of the cost. Read more on Property Reporter.

https://www.propertyreporter.co.uk/finance/one-in-ten-reliant-on-overdrafts-to-pay-their-rent-or-mortgage-claims-new-research.html

Low Mortgage Rates Continue To Drive First-Time Buyer Growth

UK based residential chartered surveyors, e.surv, have reported that a prolonged period of low rates coupled with flat house price growth has helped boost the number of mortgages approved to buyers with small deposits. According to the data, there were 66,059 residential mortgages approved during August 2019 - 1.9% lower than last month but marginally up compared to August 2018, rising 0.1% year-on-year. Read more on the Property Reporter website.

https://www.propertyreporter.co.uk/finance/low-mortgage-rates-continue-to-drive-first-time-buyer-growth.html

Self-Employed People Have Little Expectations Of Securing A Mortgage

More than a third of self-employed would-be mortgage applicants didn’t go ahead because they expected rejection, a new study has found. One in five who applied were turned down because of insufficient proof of future earnings. The study, by specialist lender Together, found that 36% of self-employed people who wanted to buy a home of their own decided against applying in the past five years because they expected to be turned down. Self-employed borrowers are being put off before even applying for a mortgage or remortgage as they worry about strict rules on proof of earnings at High Street lenders. Read more on the Property Wire website.

https://www.propertywire.com/news/uk/self-employed-people-have-little-expectations-of-securing-a-mortgage/

Banks Approve Fewer Mortgages In February As Brexit Nears

British banks approved fewer mortgages in February than during January, industry data has showed. Seasonally-adjusted data from the UK Finance industry body showed banks approved 39,083 mortgages last month, down from 39,910 in January. The value of net mortgage lending increased by 711 million pounds, the smallest rise since April 2016 and around half the size of increases in much of last year. The figures added to signs of a weakening in Britain’s housing market ahead of Brexit. Overall consumer credit growth also slowed, rising by 3.8 percent compared with February last year, the smallest increase since October, the UK Finance data showed. Read more on the Reuters website.

https://uk.reuters.com/article/uk-britain-economy-lending/british-banks-approve-fewer-mortgages-in-february-as-brexit-nears-uk-finance-idUKKCN1R70Y2

Retirement Interest-Only Mortgages Offer Lifeline To Older Borrowers

A new breed of interest-only mortgage for older people is starting to take off. These deals could throw a lifeline to thousands of people who have an interest-only home loan that’s coming to an end, but don’t know how they are going to pay back what they owe. Interest-only mortgages became virtually extinct following the credit crunch. During the past few years some older homeowners with these mortgages have found themselves staring down the barrel of a big shortfall and worried they could lose their homes. The Financial Conduct Authority last year gave the green light to a new type of interest-only deal known as “retirement interest-only” mortgages and are a little more pricey than standard home loans. Read more on the Guardian website.

https://www.theguardian.com/money/2019/mar/23/retirement-interest-only-mortgages-offer-lifeline-to-older-borrowers

First Time Buyer Mortgages Strong Despite Ongoing Brexit Uncertainty

Figures show a surge in first time buyers securing mortgages in recent months, despite the market showing continued signs of Brexit-fuelled uncertainty. Data from the Intermediary Mortgage Lenders Association shows that 89 per cent of first time buyer mortgage offers were completed in that three month period. This is a three year high and is up from 81 per cent in the third quarter of 2018. Brokers reported overall mortgage completions (to all buyers, not just first timers) were up by five per cent quarter-on-quarter at the end of 2018, to 87 per cent – the highest figure on record. Read more on the Estate Agent Today website.

https://www.estateagenttoday.co.uk/breaking-news/2019/3/first-time-buyer-mortgages-strong-despite-ongoing-brexit-uncertainty

Help For 'Mortgage Prisoners' Sought By FCA

Thousands of "mortgage prisoners" who are paying high borrowing rates but are unable to switch to better deals should be given more help, the UK's financial regulator has said. These homeowners took out mortgages before new, stricter rules on affordability were brought in. The Financial Conduct Authority (FCA) also said about 30% of borrowers failed to find the cheapest mortgage deal. However, it said competition in the market worked well for many people. The FCA's comments came in an interim report into the mortgage market. Read more on the BBC website.

http://www.bbc.co.uk/news/business-44001514

Mortgages Are Now The Most Affordable Since The Mid-1990s

The proportion of homeowners’ income being swallowed up by mortgage payments is now one of the smallest since the mid-1990s, according to the Halifax. It said typical mortgage payments accounted for less than a third (29%) of homeowners’ disposable income in the last three months of 2017 – down from almost half (47%) during the same period in 2007. This figure is also “comfortably below” the long-term average of 35% for the period between 1983 and 2017. The bank said that in the second quarter of 2013 the figure went down to 26.3%, and ended that year close to 28%. Prior to that, you have to go back to the spring of 1996 for the lowest figure on record: 23.6%. Read more on the Guardian website.

https://www.theguardian.com/money/2018/mar/17/mortgage-payments-most-affordable-home-loans-halifax

UK Tenants Paid Record £50bn In Rents In 2017

The total amount of rent paid by tenants in Britain soared to more than £50bn in 2017, more than double the level of a decade ago, and may soon eclipse the entire sum paid out by homeowners for their mortgages. The figures, compiled by the UK’s biggest estate agency and mortgage broker, Countrywide, reveal the dramatic reshaping of the property market in recent years as home ownership levels have gone into reverse. Last year, tenants in Britain paid a record £51.6bn in rents, an increase of £1.8bn on the previous year and more than twice the £22.6bn shelled out in 2007. Read more on the Guardian website.

https://www.theguardian.com/money/2018/feb/12/uk-tenants-paid-record-50bn-in-rents-in-2017

Tenants In Scotland And London Most Concerned About Rent Rises In 2018

Tenants in parts of the UK are concerned about their rents rising in 2018 with those living in London and Scotland most worried about, new research shows. Some 52% of those living in London and 55% of those in Scotland expect their rents to increase and more than a third in all other English regions are also expecting rents to rise. In London 9% expect rents to go up a lot. Overall, 42% of tenants in all regions said they would not be able to afford any increase in monthly rental repayments, compared to just 11% of mortgage holders. Read more on the Property Wire website.

Quarter Of Renters Spending Half Their Income On Housing

YouGov survey shows how wages are the biggest cost every month. The results showed that mortgaged homeowners are definitely in a stronger position than tenants when it comes to affordability, with 15% of mortgaged homeowners spending more than half their incomes on housing, compared to the 24% of private renters saying the same. Almost half of mortgaged homeowners (44%) are spending up to 30% of their monthly income on housing, which is perfectly within the affordable range. However, just one in five private renters (20%) can say the same – or less than half the proportion of mortgaged homeowners. Almost one in four private tenants (24% excluding “don’t know”s) admitted to spending over half their income on housing. Read more on 24housing.

Help To Buy Sugar-Rush Reveals Government’s Out Of Ideas On Housing

The Help to Buy initiative— supplying government equity loans of 20% to buyers of new homes, who need only chip in a 5% deposit — has already been extended twice since its introduction in 2013.  Back then high loan-to-value (LTV) mortgages of 95% were rare. Now there are almost eight times as many, with about 300 products on the market. So it was depressing that the Government chucked another £10 billion at HTB as Tories panic about frustrated homeowners shut out of the market. Read more on the Evening Standard website.

Include Rent Payments in Credit Scores

Rent payments should be included when calculating credit scores to support tenants wanting to buy a home of their own. The Residential Landlords Association (RLA) found that 61 per cent of landlords would support such a move. At present, credit rating agencies do not routinely include rent payment history when calculating credit scores. This means a tenant can find it difficult to access a mortgage, even if they have a long history of rent being paid in full and on time. Including rent payment in this way would also support landlords, providing them with a more accurate assessment of a prospective tenant’s credit and rent payment history. Read more on the RLA website.

Lowest Number Of New Home Mortgages Approved For Nine Months

Banks approved the lowest number of new home mortgages for nine months in June. Banks gave the greenlight to 40,200 house purchases in June, down from 40,287 in May. That is the lowest level for new home mortgage approvals since September - when approvals slumped to 38,893. Gross mortgage borrowing was for June was relatively in line with the previous month at £13 billion, versus £13.2 billion in May, but marked a 6% jump from levels tracked for June 2016. Analysts are now expecting a further slowdown in the housing market, which has already shown signs of cooling.  Read more on the Belfast Telegraph website.