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First time home buyer mortgage deals improving

[ Posted February 25th, 2012 ]

Despite claims that mortgage rates are increasing and that first time home buyers are going to have a harder time getting their foot onto the property ladder, it seems that the mortgage market is actually catering to them for the moment.

In fact, as the free stamp duty Government plan comes closer to the end it seems that banks are offering more mortgage deals in order to encourage first time home buyers to take advantage of the great deals. The fact is that there are so many great deals on the market right now that the competition is actually intense among those attempting to offer the best lending deals.

First time home buyers have until the 25th March to purchase a home that is valued at less than £250,000 without worrying about paying the stamp duty, and banks seem to know this as they are rushing to cash in on those taking advantage of the scheme.

In fact, despite dismal housing market predictions, a 7% increase in the amount of first time home buyers was seen in December 2011 as savvy home shoppers took advantage of the best mortgage rates out there on the market, according to data compiled by the Council of Mortgage Lenders.

Over the next month, the increase is alleged to be slightly higher as new bank lending options are going to likely fuel the fire. In fact, some banks are offering fixed mortgages that start with LTVs as low as 95%.

For those that want to get out of the ever increasing rental prices, and start actually placing their money in an investment, these deals that come with a low deposit may be all that is needed to actually start to get a leg up on the  property market.

The Post Office is one of the lending agents that have attacked the first time home buyer market by offering lower mortgage rates that only come with a 90% LTV, making them more affordable.

Experts still warn that the lending criteria for these loans are strict, so only those with good credit are going to be able to actually take advantage of the loans. However, the new offers from Lloyds, Nationwide, First Direct, Chelsea Building Society, and other lenders are still going to open the market up to those whose only problem has been affording a high deposit upfront.

Strong demand encouraging buy to let mortgages

[ Posted February 24th, 2012 ]

The Council of Mortgage Lenders stated that while the buy to let mortgage rates may not be as great as they once were, the market as a whole is recovering from its depression in 2009 thanks to the high demand for rental housing.

Figures from the CML from last year reveal that there were 123,000 mortgages completed, which is substantially higher than the amount completed in 2010 (about 94,000).  This is due to the fact that with the housing market becoming more unaffordable for the first time home buyer, landlords are stepping up to take advantage of the new rental demand.

The CML went on to offer an actual monetary value on the market stating that  about 25% of all buy to let mortgage rates were valued at around £4bn, allowing them to make up a total 1of 1% of all of the mortgage lending that was offered by banks in 2011.

Director of the CML, Paul Smee, stated that buy to let mortgage lending is one of the best performing areas of the mortgage market. Due to the demand for rented property continuing to increase there are more landlords taking advantage of the deals.

Smee continued to say that so long as the demand stays high the expectation for the buy to let market is going to stay high as well. He added that the figures from last year do not reveal that buy to let is actually taking away properties from first time buyers, but instead is offering a unique option that needs to be available in the modern housing market.

Smee also explained that there are some benefits to renting a home that should not be passed by, especially as the average mortgage rates and LTVs are keeping many home owners off the market.

The rental market, in addition, offers flexibility to renters which is one area that mortgages cannot, especially at this point in time. Chief executive of Dragonfly Property Finance, Jonathon Samuels, said that while the buy to let market is not quite up to its previous high of 2007, it is clear from the figures released by the CML that the market is starting to recover and will reach new heights in a few more years if it continues its recovery at this pace.

Buy-to–let mortgages steadily increase

[ Posted February 14th, 2012 ]

New figures from the Council of Mortgage Lenders show that many investors jumped at the excellent buy to let mortgage rates that were available on the market. In fact, for those that were looking for a good deal, CML reports that there were about 124,000 different products available compared to the 94,000 that were on the market the previous year.

The increase in products means that consumers had options when it came to picking who they would go with, and more options meant low mortgage rates for most as the lenders were competing for business. One of the reasons that there is so much more buy to let activity is the fact that there has been an increase in the amount of tenants in the UK as the property market slowly shifts towards a rental market.

This is due to the fact that many first time buyers are having a hard time raising the required deposits for a mortgage even if the lower mortgage rates sound good.  The tightening of the credit criteria required to receive a loan has also impacted many renters that ordinarily would have purchased a home.

Lenders have responded to the situation by offering better buy to let mortgage rates for landlords although the CML still believes that there are plenty of offers out there for first time buyers if they can meet the correct set of criterion.

Overall, in 2011 about £14b worth of deals were completed which is the largest amount since 2007 when the housing market actually collapsed along with the economy, but it was still only half of the whopping £28b that was seen in 2008 making it a market that still has a lot of recovering potential to come. Yet the steady increase is encouraging.

During the last quarter of 2011 there were 38,000 mortgages approved totalling up to £4bn which was a slight increase over the higher performances of the third quarter as well. This suggests that the buy to let market is tentatively starting to come back. Director General for CML, Paul Smee, stated that buy to let lending continues to remain strong and so long as demand for rented property continues to grow it is reasonable to see reflected growth in the actual buy to let market.

Post Office reduces its mortgage rates

[ Posted February 13th, 2012 ]

The Post Office announced this week that they would offer some of the best mortgage rates so far seen in 2012, and it is true that some of their products are sitting at the top of the best deals for the year. The lending provider announced that they will cut 1.01% off their entire variable and fixed mortgages with the rate change effective immediately. Therefore, many of their loans are now much more affordable and something to take a second look at for those who want to remortgage with a good rate.

The top product to take a look into is the five year fixed mortgages that are now set at 3.38%, making it one of the top deals on the market for those who want the security of a five year fixed rate. Attached to the mortgage is a £995 fee, but when you take a look at the mortgage rate the fee is almost a drop in the hat, especially when you consider the fact that as many banks keep increasing their rates the new five year fix is almost the same as most banks’ two year fixed products.

In order to take advantage of the deal remortgages or new home buyers must come up with a 75%LTV. Those who are looking to get their foot onto the housing market for the first time may want to take a look at the two-year fixed mortgage that comes with the low rate of 2.73% although home owners must come up with a 65% LTV.

For this reason, those seeking to remortgage their home in order to get a lower monthly mortgage rate will most likely be the group that takes advantage of it.  There is also a three year product set slightly higher at 2.95%.  These mortgage products also have an attached £995 fee.

Head of Post Office mortgage division, Mike Cook, said that they are happy that they have been able to drop their mortgage rates while expanding the range of products they can offer consumers. Those who do not have the ability to meet a high deposit should also check out the two year fixed products that come with a high 80% LTV and the low rates of 3.29% or a three year fix at 3.89% that only requires an 85% LTV.  Tracker products are also available at a variety of different rates.

Ten year fixed mortgages popular

[ Posted February 11th, 2012 ]

Norwich & Peterborough Building Society has decided to take their ten year fixed mortgages offer off the market after it experienced a high demand and completed as many deals as they could offer lending for. In these times of economic uncertainty, people apparently jumped at the chance to get a secure rate before the market explodes again, making it a very successful offer for N&P.

The bank offered lenders the chance to sign into a mortgage for ten years at the low rate of 3.99% with a 75%LTV attached to the offer, making it a great choice for those who wanted to remortgage at a solid rate. The ten year fixed mortgage product was one of the best mortgage rates of its kind on the market and offered security for many homeowners that would take them up until the close of their mortgage.

Plus, it had a low arrangement fee of just £295 making it an excellent choice for those who wanted a low cost way to buy security over the following for the next few years.  The product was officially pulled off the market on February 6th, but those who had already made agreements and appointments with N&P will still see the deal honoured.

It was a surprise to see such a large uptake of the deal, given the fact that the Bank of England has left the base rate down at the historically lowest  0.5% for the last few years, and there is still not a clear cut time frame for when it may rise. However, despite this fact the low mortgage rate was still attractive to most and quickly became oversubscribed after only being on the market for justover one month. This is a clear sign to other banks that ten year fixed mortgage products are an attractive choice for those who own a home.

Richard Barker, the N&P Product Manager, stated that the bank felt that it was an excellent time to offer a ten year mortgage product to the public and they were proved right after they saw the high demand for the deal they had offered. He added that the extra incentives that were tacked onto the deal such as cashback and low fees also helped to draw more consumers towards the amazing rate.

He added that they had to take the product off the market in order to keep their high customer service standards but in the future hope to be able to offer another similar product to consumers.

End of 2011 great for buy to let mortgage rates

[ Posted February 11th, 2012 ]

In a new survey released by Paragon landlords about the last quarter of 2011, the results were glowingly in support of the low mortgage rates that were available on the market. A combination of falling house prices and some of the best mortgage rates led many to expand their portfolios during the close of the year. As tenant demand continues to increase it seems that landlords are sitting in exactly the right position to make some money with wise investment and letting principles intact.

The survey, PRS Trends, is carried out every quarter and asks a sample of landlords for feedback on rental income levels, the amount of tenant demand out there on the market, their portfolio size, and how they feel about the current buy to let mortgage rates.

Most landlords reported that they were getting the highest yield from their properties during the last quarter of the year when compared to the other three quarters of 2011.  In fact, on average landlords saw their yield increase by about 0.5% from the third quarter to the fourth quarter.

Another half of the landlords in the survey reported that they had noticed demand increase from tenants that were looking for places to let during the last quarter showing a solid increase of about 6% during the previous quarter. It is most likely that this trend is going to continue over the course of 2012 as many landlords will see more people heading through their doors instead of taking out a mortgage of their own.

The same trends have been noticed within the commercial mortgage as well as most businesses would whether rent a property over owning it. Landlords were also questioned about buy to let financing options during the last quarter of the year in regards to how available it was to them.  27% felt that it was widely available and easy enough to attain if wanted with a slightly higher 35% stating that they felt there were still some limiting terms placed on mortgage portfolios.

Either way, the statistics from the survey prove that the last quarter of 2011 was an excellent year for those who are an active part of the buy to let market and that the rental market is likely to continue to expand over the coming year.

Chelsea Building Society new mortgage deals

[ Posted February 6th, 2012 ]

Chelsea Building Society is offering new mortgage rates that are set to be a great deal for those looking for long term fixed mortgages. The new mortgage deals start out at 3.19% and will stay at this for five years  and will be particularly beneficial for those who want the security of knowing that their mortgage will not increase over the coming years, despite the shape of the economy.

Outside of credit criteria, the new mortgage deal comes with a 70% LTV and an upfront arrangement fee of £1,495, making it a better choice for those who have equity and want to remortgage their home at a better rate. Finance analyst Andrew Hagger from the website stated that the deal is a great idea for those that plan on borrowing over £117,000 or more because any less and you will be better off borrowing at a slightly higher rate and not paying any arrangement fees.

He mentioned a deal that is being offered by the Co-Operative Bank that comes attached with a 3.59% mortgage rate that doesn’t have a product fee that would be an overall better deal for those with lower borrowing totals. Clare Francis, a financial analyst from also offered her take on the new best mortgage rates from Chelsea Building Society, stating that the low 3.19% is going to look enticing at first to many first time home buyers because it is a great rate for a fixed mortgage.

She added that the high deposit required for the mortgage will, however, keep many from actually taking advantage of the low mortgage rate.  She added that those that are looking for greater security in the coming months are going to want to take a harder look at the affordability of the mortgage as it may be the best option.

In terms of the market outlook the guide for the mortgage rate, the base rate from the Bank of England has been sitting at 0.5% which is a historic low, since March of 2009.  So long as this rate remains low, and there is not too much more economic turmoil,  then mortgage rates should remain low overall.

Most experts believe that it will stay down over the course of 2012 but that eventually it is going to jump up, which will greatly affect the mortgage market by forcing many homeowners to dig a little deeper into their pockets in order to make housing payments.

House prices drop during January

[ Posted February 4th, 2012 ]

Despite the fact that many people rushed out to secure fixed mortgages during January when the mortgage rates started to increase in order to lock down better long term rates, house prices still started to drop. One reason for the drop is that many predict the market is going to grow stale again in the coming months as the rates increase and interest in home buying decreases.

Without much movement in the market house prices will continue to decrease, and some are even predicting that the prices are going to stray ‘sideways’ over the rest of 2012. According to new figures released from Nationwide, house prices fell by about 0.2% during January which is reasonably steady compared to the last quarter of 2011.

This is great news for first time home buyers because low mortgage rates and falling house prices make owning a home the cheapest it has been for ten years.  However, LTV’s remain high and the large deposits required for purchasing a mortgage are keeping many first time buyers from getting a leg up on the property ladder.  Tighter credit restrictions are also keeping many first time home buyers away from the housing market.

House prices still remain about 0.6% higher than they were in January of last year, which means that even without the best mortgage rates the housing market is managing to claw back a bit of its momentum. Therefore, the great housing dip that many analysts are afraid of occurring may not be half as bad as many people think.

Of course if the demand from buyers continues to stay low, and more properties are released into the market as a result of foreclosure, or simple sales without much uptake then house prices will still continue to edge downwards slowly. Chief economist for Nationwide, Robert Gardner stated that he believes house prices are not going to increase much over the course of the year due to the fact that most potential buyers are not going to be able to afford the high deposits.

He added that as more properties continue to flood onto the market the prices are only going to go sideways and possibly begin to fall over the next few months.  Those who can take advantage of the market will see some great mortgage deals including a new fixed mortgage from Chelsea Building Society set at a low 3.18% for five years. 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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