UK Mortgages At 12 Year Low
Tagged: mortgageHowever, it isn’t only first time buyers who are struggling to cope with the current situation regarding the housing market. Those who are looking to move into bigger properties are being hit hard as well because they need bigger mortgages in order to do this but are unable to get one. The current number of mortgage approvals at the moment is the weakest since the middle of 1995 so it is not surprising that people are starting to panic and look for alternative options.
Those who already have mortgages on their home but were hoping to move to a bigger property are starting to think of other ways of creating more space. An extension has become one of the most popular solutions because not only does it solve the problem of lack of space but it also adds value to the home.
Loft conversions have become especially popular because it means that people can add the much needed space to their homes without losing any space in the garden or any other areas around the home. Very few people actually use their loft for anything other than storing things that they probably even forgot that they have so it seems the most logical place to add an extra room.
Although it may initially seem like loft conversions are expensive, the benefits are endless and it is much cheaper than many of the other options. It is a bad time to buy property because mortgages are becoming increasingly difficult to get and it’s a bad time to sell property because house prices are starting to drop. Those who already have mortgages on their homes are realising that loft conversions can be much more beneficial to them nowadays. This is because not only do they get the extra space they need, they can hold out until the market picks up again and add value to the property when they eventually do sell up.
With the US economy hitting more and more problems at the moment as well, the future of the UK housing market looks set to be very unpredictable. Even people who can get mortgages are realising that this isn’t a time to take risks so are settling for the safer option of loft conversions in order to improve their homes.
The Story of the UK Hips or Home Information Pack
Tagged: mortgageThe pack consists of a Energy Performance Certificate. This part of the Home Information Pack is required to meet the in order to meet the requirements of the European Energy Performance of Buildings Directive. Initially the cost of a Home Information Pack, including the Home Condition Report, was estimated to be around £600 by the Government. Compulsory documents are Home Information Pack Index, Energy Performance Certificate, Sales statement, Standard searches (local authority enquiries, drainage and water search)Evidence of title, Additional information for leasehold and commonhold sales, where appropriate.
Searching Mortgage UK Provider Listings
Tagged: mortgageWhen you do conduct a mortgage search you will be asked a number of set questions. These are designed to help you and the lender, broker or advisor with you to find the mortgage that will be best suited to you and your circumstances.
In your mortgage search you will be asked whether you are a first-time buyer, whether you are moving home, or whether you are remortgaging your current home. Mortgages applicable to these circumstances can be very different. You will be asked about your income details; these may applicable to you as an individual, to the higher earner of a couple, or to a couple’s joint earnings. Multiples of earnings are used to determine what you might be able to borrow and 3.5 times the main salary is a standard amount.
When you carry out your mortgage search you will be asked about the property that you wish to mortgage. The lender will want to know its location and its value – you will need a proper valuation before you are lent the money for the mortgage.
These days there are crucial questions to answer in a mortgage search about what kind of mortgage you would like. There are a lot of different types, such as fixed, trackers, discounts, capped. Most are variable rates, but nowadays over 75% of mortgages issued are fixed rates, as people try and escape the variations that come with changes in the Bank of England’s base rate.
Another significant question in a mortgage search these days is concerning bad credit history and county court judgements. With recent problems surrounding sub-prime mortgages (those given to people with poor credit histories or exceptional circumstances) mortgage lenders are becoming more stringent than ever when before they lend money to people.
Depending on the answers you give to these questions your mortgage search will reveal a number of mortgages that are suitable for you. There is less choice in some circumstances – for example those with CCJs – and in those circumstances the mortgage applicant will probably end up paying a higher interest rate for their mortgage.
When you carry out a mortgage search with your advisor – wherever he/ she is from – you should be as honest as possible, as economies with the truth will only lead to difficulties further down the line, and that includes being honest with yourself about how much you can afford to borrow – and pay back.
It is probably wisest to carry out a mortgage search with a broker or an advisor as these people have access to the whole of the mortgage market, and they are doing it regularly so they know what’s available. In this way you will avoid a mortgage search restricted to just a few products (as from a high street lender) and you will not get caught up in a maze of confusion (possible if you did it yourself).
Why New Houses UK Schemes Can Help First Time Buyers
Tagged: mortgageNew houses in the UK offer many first-time buyers deals on prepaid deposits, money off on interest, shared ownership deals and full mortgage loan deals. For some people like me, owning a house is out of arms reach, the idea of buying a house in the current state of our economy appears to be an impossible dream. New houses UK schemes help people to get their foot on the housing ladder, also allowing them to have part ownership of a property.
The only downside to shared ownership is that you will be required to pay rent as well as your mortgage to the council, which for some people can be an expensive move to make especially if there is no guarantee of them receiving a pay rise in the future. The other disadvantage is that you will not be able to let the property unless you gain full permission from the council as it is not a hundred percent your property. Chances are you will purchase a property between 60 - 90,000 pounds, which calculates a proportion to what you will own (less than fifty percent).
Furthermore you will not have the opportunity to undergo any necessary changes or building works, as then this would require prior permission from the council. Part of the deal of shared ownership they you buy the house and are contracted for a certain length of time, as a way to help you get on the property ladder. Many people sell their share afterwards and go onto buy something for their own, therefore, it works to the buyers advantage.
However, the new houses UK scheme do offer you a brand new home, with newly fitted modern bathroom and kitchen facilities , good security system, storage room facilities, low maintenance and central heating. New build homes tend to be cheaper to run, have very little problems as everything has been built to last for a long time, have lower heating bills, are built with good insulation and they have a very good resale opportunity unlike newly renovated homes.
People considering this route into purchasing their first home, will need to consider the costs involved, whether it will make a good investment in the long run and how long they expect to pay for the property. More often than none, many of the people who buy a new home will only have bought the property on a temporary basis. Others may consider buying out the rest of the share, which is possible for those who are able to afford it.
One way to make a decision is to do your research, through speaking to other homeowners, mortgage advisors, and property development companies, or just by skimming through the internet. It is always recommended that you calculate your finances before agreeing to any kind of heavy commitment such as this, as then you will have more control over your finances. The only way you can get a hold of a new build home is by enquiring early, making an offer and making sure you take the first step.
Mortgage fraud suspects released
Tagged: mortgageNine people arrested over suspected involvement in a £40m mortgage fraud have been released on bail.
More than 50 officers from the City of London Police force arrested eight men and a woman in Sussex and north London early on Tuesday.
They are suspected of targeting Bradford & Bingley between 2005 and 2007 in a buy-to-let scam on 500 homes.
The authorities’ investigation centres on a defunct mortgage broker called Eastbourne Financial Services.
Lenders must make money available to potential house buyers
Tagged: Loans, mortgageIf the property market is to recover, lenders must make money available to potential homebuyers in the form of mortgages, it has been suggested.
According to Peter Bolton King, chief executive of the National Association of Estate Agents, the provision of such home loans would be one of three main factors in the potential rebound of the housing market in 2009.
Two million homeowners ‘considering mortgage holiday’
Tagged: mortgageA new survey has suggested that two million British homeowners are considering taking a mortgage payment holiday to help fight off the effects of the recession.
The research, carried out by Uswitch.com, also suggested that 12% of households with a mortgage wrongly believed that the interest would be frozen during a payment holiday, while 6% believed it to be completely free.
The comparison site also warned that a 12-month payment holiday could add around £10,000 onto a £150,000 mortgage, with monthly mortgage payments after the holiday increasing by £80 as a result.
A mortgage expert for Think Money said: “A mortgage payment holiday can be a lifeline for homeowners who are struggling to meet their commitments, but as the research states, it can also add a significant amount to mortgage repayments in the long run.
“We advise anyone considering a mortgage holiday to seek expert debt advice beforehand and consider all options before making a decision.”
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Think Money work with a panel of lenders to offer a range of mortgages. If you are considering taking out a mortgage, contact one of our expert mortgage advisers today.
Five-year taxpayer help for banks
Tagged: mortgageThe Treasury quietly conceded yesterday that the crisis undermining banks’ ability to borrow from each other and from financial institutions could last for five years.
In fact, it’s likely that banks’ ability to borrow on wholesale markets will never recover to the boom conditions that characterised the few years before the summer of 2007.
Either way, the Treasury is trying to help banks adjust to a prolonged funding drought by amending the terms of the Credit Guarantee Scheme it announced in October - which allows banks to purchase a guarantee from taxpayers to cover the risk of default on what they borrow from banks and money managers.
The Treasury has announced that this scheme will now run for five years, up from three years.
Which, as I say, rather implies an abandonment of the Micawberish notion that something would turn up and that banks would one day wake up to find that they weren’t being shunned any longer by institutions with big deposits to place.
Also, following pressure from the banks and the Tories, the Treasury has also significantly reduced the fee payable to it for having taxpayers in effect lend money to the banks.
It has done this by excluding from the calculation of the risk premium payable to taxpayers the great surge in the perceived riskiness of banks that took place in September and October.
In effect, the Treasury has converted the Credit Guarantee Scheme from an insurance policy, which was designed to provide comfort to markets that banks wouldn’t collapse for want of access to funding, into a new and substantial source of finance for banks, to replace the funds that have disappeared with the de facto closure of wholesale markets.
Or to put it another way, the scheme has been redesigned in the hope that it will now help banks to raise money for lending to all of us.
That represents a fairly substantial policy shift. And it’s slightly odd that the Treasury has announced this in a whisper, through a parliamentary written answer made by Ian Pearson, a junior minister.
So far, banks have raised just £20bn from the scheme in its previous more expensive form. If the repricing means they now borrow the full £250bn on offer, as well they now might, taxpayers would be underpinning a good deal of banks’ mainstream lending.
We, as taxpayers, would in effect have replaced the shrunken wholesale markets.
In respect of how the financial economy works, that’s about as big a change as it’s possible to imagine: so it’s a shame, perhaps, to keep that quiet.
Five-year taxpayer help for banks
£400m fund to help first-time home buyers
Tagged: mortgageFirst-time buyers are to be given government help to buy up to 18,000 unsold properties built by 130 developers across England.
The government will set aside £400m to help first-time buyers gain a stake through an equity loan - £100m more than ministers indicated when they announced the scheme in outline in September.
Margaret Beckett, the housing minister, said 130 developers had agreed to participate in the HomeBuy Direct scheme. An equity loan, which will be free of charge for five years, could be used as a deposit & cover up to 30% of the purchase price.
That meant a first-time buyer could purchase a house worth £180,000 for as little as £126,000, the government said. As with other HomeBuy schemes, it is open to first-time buyers with a household income of less than £60,000 who cannot otherwise afford to buy.
Critics of the scheme argue it is not in the interests of a purchaser to buy at a time of falling house prices. First-time buyers also have to find a mortgage company willing to give them a loan at a time when lenders are being strict with their loans.
The news came as the Commons communities & local government select committee prepares to take evidence on the impact of the credit crunch on the housing market. It has received written evidence suggesting the government’s model for building social housing has collapsed.
Sir Bob Kerslake, chief executive of the Homes & Communities Agency, formerly the Housing Corporation, said: “There has been a tremendous response from developers to this scheme & we believe there is demand from purchasers who want to get on the property ladder.”
HomeBuy Direct is 1 of a range of schemes designed to help families to get a foot on the housing ladder.
The government has already helped more than 110,000 people buy homes through shared equity & shared ownership since 1997.
Grant Shapps, shadow housing spokesman, said: “We welcome measures that truly create affordable housing however by taking money away from existing affordable housing & pumping it into … conflicting schemes it seems this is another example of media-orientated policy [made] on the hoof.”
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£400m fund to help first-time home buyers
Shock Carphone resignation
Tagged: mortgageThere has been an astonishing announcement by Carphone Warehouse this morning.
One of its two founders, David Ross, has resigned as deputy chairman, following his disclosure to the mobile phone and internet group that between 2006 and 2008 he pledged 136.4m of his shares in the company as collateral against personal loans.
This is significant for two reasons.
First, under Stock Exchange rules, each time directors pledge shares in this way as collateral, their companies are supposed to make an announcement.
Ross failed to inform Carphone Warehouse that he had committed his shares in this way until 7 December.
It’s not clear why he failed to keep Carphone in the picture in the appropriate way. Nor is it clear what kind of action, if any, will be taken by the Financial Services Authority, the City watchdog, against this apparent breach of the rules.
As I understand it, Ross feels he was guilty of an administrative oversight. But it’s a pretty embarrassing oversight.
Second, although Ross has told Carphone that “none of these loans is currently in default”, there is also an implication in the company’s statement that he may at some future date be forced to sell some or all of the shares.
Carphone says that Mr Ross has “given an undertaking to the board to facilitate an orderly market, where possible, for any future disposal of shares in the company.”
According to Carphone, earlier use by Ross of his shares as collateral means that 177m of his shares are pledged against loans, equivalent to about a fifth of the entire company.
Investors will therefore see this morning’s announcement as raising great uncertainties about the future ownership of that fifth of the company - which at a time when life is so difficult for all retailers is something of a pain for Charles Dunstone, Carphone’s chief executive, and his executive team.
It’s also something of a personal shock for Dunstone. He was at school with Ross, or “Rossy” as Dunstone calls him. He founded the company with him. And it would be understandable if he felt a bit let down this morning.
UPDATE, 08:47 AM:
David Ross is a pretty well-known character on the British corporate scene. In May, the Mayor of London, Boris Johnson, appointed him to look after the financial interests of Londoners in preparations for the 2012 Olympics. Ross became the Mayor’s nominee on the London Organising Committee of the Olympic Games.
He’s also a director of National Express, ITIS, Intrinsic Value and Big Yellow Group.