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Remortgages Hit Record Low for Decade

[ Posted October 15th, 2010 ]

The Council of Mortgage Lenders (CML) has reported that of all mortgages approved in August only 25% accounted for re-mortgages – the lowest overall proportion seen in the past ten years. For the month of August re-mortgage numbers amounted to a mere 25,000, a 13% drop in month-on-month figures and an overall 19% drop in year-on-year numbers. This is seen to be the result of a number of factors, the least of which is the current trend for many banks to limit their overall funding to many individuals in light of the employment market becoming more and more unstable and thus affecting the financial security of any lending operation.

The shift in financial funding being granted in terms of re-mortgages becoming harder and harder to obtain is no new concept for many households thanks in no small part to increased mortgage lending regulations over the past few months. Many current re-mortgage deals are even being moved off of their current rate to the lending institution’s standard variable rate (SVR) should the borrowers be unable or unwilling to apply for another re-mortgage – not necessarily bad news for many as the SVRs of a large number of lending institutions is actually much more favourable than the rates offered on many current re-mortgages.

The record low may be bad news for many first-time buyers, however, as a large number of these require funding from their family in order to secure a home of their own. With increased limitations on funding to family this can in turn affect many young individuals or couples looking to get a home of their own and as such can only work to exclude many individuals from the property market.

Prospects Looking More and More Grim

[ Posted October 14th, 2010 ]

Mortgage approvals are still remarkably low this quarter, with prospective home owners feeling that obtaining funding for the purchase of a new home is no easier now than it was this July. In fact, the only shift to be seen in many areas is a growing lack of confidence in home prices maintaining or gaining value, with only 63% of all respondents to recent surveys stating that they feel prices will rebound again as compared to 78% just a few months prior.

The recent decline in mortgage approvals is hitting not only tracker and fixed-rate mortgages but even the re-mortgage market as more and more households shift their focus away from obtaining additional debt and instead focus on repaying existing dues. While in many ways this is good as it is a strong step to reducing consumer debt levels as a whole at the same time the reduced level of cash flow means weaker commercial strength as consumers purchase less – particularly in the area of luxury goods and other non-necessities.

While a number of economists feel that the economic shift in the property market should shift following the first quarter of next year as the market settles into a healthy equilibrium the regulations being created by many lending institutions may still limit the availability of funding to many. This will be particularly true if new regulations placing the burden of lending more on lending institutions themselves successfully take effect and thus force many institutions to not risk funding many individuals that would otherwise have received funding in the past.

Proposed Regulations Putting People on Edge

[ Posted October 8th, 2010 ]

Many home owners have gone on edge as of late following news from the Financial Services Authority (FSA) that they are looking at increasing regulations placed on home purchases. The moves, should the be enacted, would not only impose affordability tests for all mortgage applications but also increase the responsibility put on lending institutions – effectively making them ultimately responsible for all payments outstanding on loans they issue – and provide additional protection for many vulnerable customers.

The move, while seen as a positive step by some in the real estate industry in order to safeguard the economy against further recession, is being seen as a major blow by many experts such as the Council of Mortgage Lenders (CML). Citing the fact that roughly 3.8 million mortgages would have been denied from 2005 till now should the FSA’s proposed regulations have been in place, the CML is avidly opposed to any further regulation that would add strain to the already weakened economic market.

Many first-time buyers in particular are worried about what this might mean for them in their own quest to seek affordable housing. Having faced numerous issues in the past related to obtaining a good mortgage for any home purchase it is feared that further regulations could severely limit their options.

Even those wishing to obtain a second mortgage for further purchasing or a re-mortgage to eliminate some of their existing debt are worried over what increasing regulations could mean to them. At a time when lending for re-mortgages and other financing is at an all-time low any further regulations could deal a serious blow to the cash flows present in some areas and have drastic economic impacts upon many environments.

Mortgage Reduction Hitting New Highs

[ Posted October 1st, 2010 ]

In the three months from April through June of this year mortgage holders have reportedly reduced their overall debt level by roughly £6.2 billion, the largest influx of funds ever recorded by lending institutions in recent history. This trend is expected to continue into the coming quarters as well even though mortgage rates are anticipated to continue a relatively low trend going into the winter months.

Many are attributing the recent trend for existing home owners reducing the number of remortgages being sought and first-time buyers seeking to defer home purchasing to the rising costs earlier this year and various economic instability factors. Many other experts, however, feel that it is not simply these factors that are playing a major role in determining both the current situation and future of the property market but instead the fact that lending institutions are leaning more towards restrictive measures that will make obtaining a mortgage in the first place all but impossible for those without perfect credit scores and large amounts of disposable funds at the ready for personal use.

In addition to higher lending restrictions being put in place on consumers credit agencies have also reportedly been looking into adjusting credit score calculations given the growing number of consumers who are shifting more towards debt repayment rather than increasing spending. When coupled with the fact that interest only mortgages – a necessity for many new home owners to be able to afford a home purchase in the first years of entering into the real estate market – this creates a financial vortex that prevents many individuals from being able to both develop financial stability and establish themselves as desirable consumers to real estate lenders.

One thing is generally agreed upon by experts across the UK, though – the housing market is not looking at developing in any measurable positive way in the coming months and consumers should not expect to see any major positive trend in the coming quarter or two going into 2011. aims to provide every client with cheap, affordable and best mortgage loans in the UK market, however the actual mortgage rate available will depend on client's financial circumstances and credit history. Although, has made every effort to ensure that the mortgage rates listed are correct, it bears no responsibility in case of an error. 
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