Archive for February, 2008

Nationwide Building Society imposes restrictions on some of its best mortgage deals

Thursday, February 28th, 2008
Mortgage lenders are finding ways of increasing their lending rates to compensate for the property slowdown.
This from the ThriftyScot:

UK’s second largest mortgage lender, Nationwide Building Society, has increased its interest rates on mortgages for those borrowing 75% or more of the property’s value. This is a direct result of a slower housing market, higher mortgage funding costs and a general inclination for lenders to distance themselves from ‘riskier’ loans according to the Daily Telegraph, the Times and the Financial Times.

Nationwide, like a number of lenders, is showing a reluctance to lend higher ‘loan-to-values’ and now offer the most competitive rates/deals to those customers who will borrow 75% or less of a property’s value. Last week they raised the interest rate on loans above the 75% threshold by 0.2% points.

Whilst they are aware this move may cost them some customers, their spokesperson maintains,”What we would like to do is continue to lend strongly but with an eye on quality. If the only way to do that is to accept a smaller market share then we will.”

When asked for his opinion on the move, Sean Gardner, chief executive of said, ” It is a case of the less you need to borrow, the better deal you are going to be offered by lenders now.”

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New mortgage deals plummet

Wednesday, February 27th, 2008

How is the sub prime shaking out now in the property market. The Thrifty Scot has published figures showing some fairly dramatic changes

The British Bakers Association(BBA) look at the number of new loans to homebuyers as a guideline to predict future housing demand, and they report a drop of 31% last month compared with the exact same time period last year.That said, the overall picture of mortgage lending in the month of January this year showed a slight increase, mainly due to the number of re-financings.

The BBA represent almost two-thirds of the UK mortgage market and say their recent figures show net lending (that is borrowing less repayments) increased by £5.2bn, compared with an increase of £4.9bn in December and in line with the pattern for the six months before that.

There was an increase in the number of loans extended due to a substantial rise in re-mortgaging- up 39% to £79bn from same point in previous year and an increase of £11.5bn since December. House re-mortgages accounted for 49% of all approvals which supports the data produced by the BBA displaying a steady increase in re-mortgages from September last year.

New loans for equity withdrawal and other purposes have continued to fall year after year by 23.6%, but this figure is still less than the rate of declining new mortgage approvals. Roughly 39,999 of these loans were approved in January, compared with 37,867 in December.

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Darling confident about UK housing market

Monday, February 25th, 2008
Thriftyscot reports that the government are trying to talk up confidence in the uk mortgage market.

Although there has been a significant slowdown in the UK housing market over recent months the Chancellor of the Exchequer, Alistair Darling, has stated that he is still confident about the UK housing market, adding that the UK is far less vulnerable to a house price crash than the US due to a range of contributing factors, including low unemployment, shortage of housing, and falling interest rates.

Speaking at the Engineering Employers’ Federation Dinner in London, darling added that whilst repossession levels had gone up they would not reach the same level as they did in the 1990s.

He said: “Market conditions today are very different from those we saw in the early 1990s. Interest rates remain at comparatively low levels – as do mortgage rates. And unemployment is currently at 30-year lows.”

He added: “What’s more, there are important differences between the housing market in the US and the housing market here. While many US mortgages were sold at hugely discounted rates, leaving people unable to meet repayments when rates increased, lenders in the UK have been more responsible in taking account of an individual’s ability to pay. And demand for housing outstrips supply.

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