Mortgages Refused For Self-Employed Who Took Covid Grants

Some of Britain's biggest high street banks are refusing to give mortgages to self-employed people who received government grants during the pandemic. Mortgage brokers say those working in sectors like entertainment, hospitality and travel are the worst affected. Many lenders spoken to by the BBC are not accepting mortgage applications from people on furlough. Brokers said that banks often see people who have received Covid-related grants as high risk. Read more on the BBC website.

https://www.bbc.co.uk/news/business-57843756 

Banks May Start To Hit Mortgage Lending Limits

Senior Bank of England official issues warning as government reports highest April lending since financial crisis. Banks might have to reduce mortgage lending to stay within regulatory limits, a senior Bank of England official has warned as official figures released this morning showed loans at their highest level since the global financial crisis. Sir Jon Cunliffe the Bank of England’s deputy governor, said steep rises in prices meant mortgage lenders were pushing against regulations introduced in the wake of the 2008-09 crash to ensure that 85% of mortgages advanced are less than 4.5 times the borrower’s annual income. Read more on the Housing Today website.

https://www.housingtoday.co.uk/news/banks-may-start-to-hit-mortgage-lending-limits/5111939.article 

Johnson Warns Banks They Must NOT Refuse Mortgages On Homes With Cladding That Are 'Perfectly Safe'

Boris Johnson has warned banks they must not refuse mortgages on homes with cladding that are 'perfectly safe'. Thousands of homeowners face the cost of removing cladding from their buildings in the wake of the Grenfell tragedy, which killed 72 people in 2017. Speaking at Prime Minister's Questions, Mr Johnson was asked to come forward with a plan to fix the cladding crisis that does not burden leaseholders with the costs of removing the material. The Prime Minister told Labour MP Seema Malhorta that the onus should be on banks not to 'unreasonably refuse mortgages on properties that are perfectly safe'. Read more on the Mailonline website.

https://www.dailymail.co.uk/news/article-9193901/Boris-Johnson-warns-banks-NOT-refuse-mortgages-homes-cladding-perfectly-safe.html 

Mortgages Hit 13-Year High, But Consumers Wary About Borrowing

Lenders approved the most mortgages in more than 13 years in October, Bank of England data shows, suggesting no let-up yet in a post-coronavirus lockdown bounce-back in the country’s housing market. But the figures also underscored a broader wariness about day-to-day borrowing among many consumers - whose spending helps drive the economy - as the country was hit by a second wave of COVID-19 cases. Mortgage approvals for house purchase hit 97,532, up from 92,091 in September and higher than all forecasts in a Reuters poll of economists. Read more on the Reuters website.

https://uk.reuters.com/article/uk-health-coronavirus-britain-economy/uk-mortgages-hit-13-year-high-but-consumers-wary-about-borrowing-idUKKBN28A127

UK Mortgage Approvals Jump As Housing Market Bounces Back

Mortgage lending accelerated in July, a latest sign of a post-lockdown bounce-back in the housing market, and consumers returned to borrowing, data from the Bank of England shows. Mortgage approvals jumped to 66,300 from just under 40,000 in June and seven times higher than their coronavirus pandemic low of barely more than 9,000 in May, the data showed. Economists polled by Reuters had expected about 55,000 approvals in July. Read more on the Reuters website.

https://uk.reuters.com/article/us-health-coronavirus-britain-boe/uk-mortgage-approvals-jump-as-housing-market-bounces-back-idUKKBN25S4CV

Mortgage Lending Fell In 2019

2019 saw the first fall in annual gross mortgage lending since 2010, the UK Finance Household Finance Review (Q4 2019) has revealed. There was a decline of new loans for both residential and buy-to-let purchase products, while first-time volumes fell by 0.6%. Miles Robinson, head of mortgages at online mortgage broker Trussle, said: “The fall in mortgage lending highlights what we’ve known for some time; that there is a real lack of suitable properties at the more affordable end of the market. When you also consider the closure of the government’s Help To Buy ISA – there will be even more pressure on the new Chancellor Rishi Sunak to deliver for first-time buyers in next week’s Budget.” Read more on Property Wire.

https://www.propertywire.com/news/mortgage-lending-fell-in-2019

Bank Of Mum And Dad 'One Of UK's Biggest Mortgage Lenders'

Parents spend so much money to get their children onto the housing ladder that they are now among the biggest lenders in the UK, a survey suggests. The average parental contribution for homebuyers this year is £24,100, up by more than £6,000 compared to last year, according to Legal & General (L&G). Collectively parents have given £6.3bn, high enough to rank the bank of mum and dad 10th if it was a mortgage lender. Clydesdale Bank, the UK's 10th largest mortgage lender lent £5bn last year. Read more on the BBC website.

https://www.bbc.co.uk/news/business-49477404

Most Mortgages Go To First-Time Buyers

First-time buyers now make up the majority of home purchases bought with a mortgage in the UK, figures show. The Halifax bank said the last time such a situation existed was 1995. Its research found Pendle in Lancashire and Copeland in Cumbria were the most affordable areas, with homes costing 2.6 times local earnings on average. An average deposit of £32,841 is required to get on the property ladder in the UK, but first-time buyers in London need to find £110,656. Read more on the BBC website.

https://www.bbc.co.uk/news/uk-47336500

UK Mortgage Approvals Drop To Six-Month Low

British banks approved the fewest mortgages for house purchase since March last month and demand to refinance home loans also fell following the Bank of England’s interest rate rise in August. The number of mortgages approved for house purchase dropped to a six-month low of 38,505 in September from 39,241 in August, down 6.7 percent on a year earlier. Britain’s housing market has slowed since the Brexit vote in June 2016. Most of the weakness has been in London and neighbouring areas, which have also been hit by a rise in purchase taxes for property worth over £1 million. Net mortgage lending dropped to £1.550 billion last month from 1.617 billion pounds, the weakest since January. Read more on the Reuters website.

https://www.reuters.com/article/us-britain-economy-lending/uk-mortgage-approvals-drop-to-six-month-low-industry-data-idUSKCN1MY103

New Mortgage Lending In UK Reaches Highest Level Since 2008

British households are taking on the highest levels of fresh mortgage debt since the beginning of 2008, spurred by low interest rates from the Bank of England.  Banks extended new mortgage commitments to borrowers worth £69.6bn in the three months to the end of September, an increase of 14% on the same period in 2016 and the highest amount recorded over a three-month period since the start of 2008, official figures show. The figures come after John McDonnell, the shadow chancellor, warned that banks are becoming increasingly engaged in a “race to the bottom” on mortgages, credit cards and other consumer loans that has worrying parallels to years before the financial crisis. Read more on the Guardian website.

Home Buyers Up 12% In May Compared To April

On a non-seasonally adjusted basis, UK Finance data shows that mortgage lending in May rose:

·         Home buyers borrowed £10.8bn, up 10% on April and 16% on May 2016.

·         Within this, first-time buyers borrowed £4.7bn, up 12% both on last month and on May 2016.

·         Home movers borrowed £6.2bn, up 11% on April and 22% year-on-year.

·         Home-owner remortgage activity was up 10% by value and 9% by volume on April.

·         Gross buy-to-let totalled £2.9bn in May, up 16% on April and 12% compared to May last year.

Read more on the UK Finance website.

Irresponsible Lending In The UK Could Lead To Return Of ‘Negative Equity’

TSB has reduced mortgage lending to first-time buyers, especially in London, amid growing concerns that many homeowners without significant equity in their homes could soon find themselves in ‘negative equity’ as a result of falling house prices, particularly in the capital. In what may be an eerie echo of the start of the financial crisis, TSB’s chief executive Paul Pester has warned that many lenders in the UK are being reckless by providing property buyers with cheap loans that they may not be able to afford, especially when interest rates eventually rise, at a time when home prices are starting to look increasingly vulnerable. UK house prices fell for the second month in a row during April, according to the Nationwide. Read more on Property Investor Today.

UK Housing Market Is In Neutral Gear, Say Lenders

The UK's housing market is in "neutral gear" and the general election will do little to change that, the mortgage lenders' trade body has said. The Council of Mortgage Lenders (CML) said gross mortgage lending totalled £21.4bn in March, in line with the monthly average over the past year. But it was much less than the £26.3bn lent in March last year, when there was a surge in buy-to-let borrowing. Then, landlords rushed to buy homes ahead of a rise in stamp duty. Since that surcharge came in, the buy-to-let market has become more subdued, as has the market for home movers. Read more on the BBC.

Gross Mortgage Lending Increases By 12% In 2016

The Council of Mortgage Lenders estimates that gross mortgage lending reached £20.4 billion in December. This is 4% lower than November (£21.2 billion), and 4% higher than December 2015 (£19.7 billion). This brings the estimated total for the year to £246 billion, a 12% increase on 2015’s £220 billion and the highest annual gross lending figure since 2008. Gross mortgage lending for the fourth quarter of 2016 was therefore an estimated £62 billion. This is a 3% decrease on the third quarter and closely matches the 61.8 billion lent in the fourth quarter of 2015. Read more on the CML website.

Mortgages Hit An Eight-Month High

Mortgage lending has hit an eight-month high as house-buyers return to the market. Bank of England figures showed 67,505 loans were approved for house purchase in November – the most since March. The report suggested confidence has returned to the housing market following a dip in lending in the aftermath of the EU referendum in June. Confidence was also hit by a string of tax changes introduced by George Osborne, including higher stamp duty on more expensive properties and a raid on buy-to-let landlords. Just 61,359 loans were approved for house purchase in August, the lowest level since February 2015, as would-be buyers stayed away. Read more on the Daily Mail website.

Mortgage Lending Increases 7% In August

Mortgage lending in the UK increased month-on-month in August, as fears over the fallout from the Brexit vote on the housing market proved to be "wide of the mark”, the industry body for bank and building societies said. Gross mortgage lending increased by 6.8% in August to an estimated £225.5bn, from July’s £21.1bn, the Council of Mortgage Lenders (CML) said. With mortgage lending growing 15.1% year-on-year, the highest August number since 2007, economists said this undermined the belief that UK house prices would decline in the coming months. Read more on the CML website.

Rents Set To Sky-Rocket Because Of Osborne’s Tax Grab

Landlords across the UK have already started to increase rents for current tenants as a consequence of George Osborne’s attack on the private rental sector (contained in Clause 24 of the Finance Bill). When a similar policy was adopted in Ireland in 1998, rents increased by almost 50% over the subsequent three years.  Top economist, Professor Philip Booth said that Clause 24 ‘didn’t make sense.’  The reason for this is that landlords will pay tax on interest payments they have paid to the mortgage lender as well as tax based on actual profit; landlords will in effect be taxed on an amount of fictitious profit, and the Government will tax the same money twice, as the lender already pays tax on it. ‘Private’ landlords’ businesses will also face the unique situation in the business world of not being able to offset the main cost of creating a taxable profit. Read more on Property 118.

Mortgage Lending Picking Up

Mortgage lending is on an "upward trajectory" after a slow start to the year. Lending to first-time buyers and home movers increased in the third quarter of the year compared with the previous three months. It was also on the rise compared with the same period last year, the Council of Mortgage Lenders (CML) said. Many borrowers are seeing the benefits of low costs owing to the continuing record low in the Bank rate. Gross mortgage lending totalled £61.4bn in the third quarter of the year. This was up 18% on the previous quarter and a 12% rise on the third quarter of 2014. Read more on the CML website.