A Positive Outlook on the Current Status of UK Repossessions

I am sure you are wondering what is there that is truly good to say when it comes to repossessions.  The good news is that the number of repossessions occurring across the UK is on a downhill slide.  The number of people who are currently under extreme financial stress and facing repossession of homes and/or businesses is gradually decreasing.

The current drop cannot be considered a permanent trend, but at least offers a breathe of fresh air not only for lenders but also for many individuals whose investments were on shaky ground.  The primary key to saving many of these distressed properties are the in truth the low interest rates that have emerged as the best rates in quite sometime.  This has allowed struggling individuals and business to have a little extra breathing room when it comes time to make those monthly mortgage payments.  With the overall amount of debt across the country in a state of reduction, the outlook for those who were fighting to survive is finally headed back towards to the direction of self sustaining and healthy. 

While these improvements have thus far been short term, the hopes for continued forward movement are strong.  With many factors possibly contributing to this upward trend of improvement such as season factors, current interest rates, and slight rise in employment, it is important that those in distress take advantage of this dry time just in case another storm blows in disrupting the postive movement.  Buckle those seat belts and enjoy the ride while the opportunity is there.

In response to the Treasury Committee’s finding, the Council of Mortgage Lenders (CML) is happy to see that lenders are being pro-active when their borrowers hit difficulties with their mortgage handling.

According to their study, there are many lenders who are helping borrowers to keep their homes when they are facing temporary difficulties.

When it comes to fees, the CML agrees with the FSA (Financial Services Authority) of England that it should reflect actual work being done and that the fees and charges should not be for the pure profit motive.

While they may not be appropriate for everyone, there are mortgage rescue and homeowner support schemes that were developed by the Government, which could be used by those borrowers who are currently in arrears. They do suggest that lenders and borrowers should be in communication with each other to figure out the best way to resolve the problem.

Regarding the stance that the CML has on the lending industry, the CML head of policy, Jackie Bennett, had to say, “The industry is fully engaged to help its customers through the recession where they have a good prospect of being able to get back on track and sustain their home-ownership in the long term. Repossession remains a last resort.”

She continued, “Lenders have worked hard to ensure that treating customers fairly is at the center of their arrears management. This doesn’t necessarily mean that consumers won’t be charged, but it does mean that the charges will be a reasonable reflection of costs and that they will be applied in ways designed not to exacerbate the borrower’s financial problems.”

She finally said, “We will be publishing our arrears and possessions figures soon. These are likely to demonstrate further that lenders remain committed to helping borrowers who fall into difficulty, where those borrowers are talking to their lenders and committed to helping themselves.”

Over a third (35%) of finance professionals would have the temptation to invest a redundancy payout in a buy to let property, this according to new research from PropertyEarth.net, the chain free property portal.

According to the research, around 30% of finance professionals would use a redundancy payout to cover everyday living costs. Property is the preferred outlet for those looking to invest their lump sum of the money that they have. This would be followed by a savings account (14.6%), gold (10.7%), FTSE 100 stock market shares (7.8%) and oil (1.5%).

The average severance package received by banking, finance and insurance professionals on redundancy is £21,300. This would be enough to cover the cost of a 25% deposit on a chain free one-bedroom flat listed on PropertyEarth.net. The cost of the flat would be on average £84,208.

The average PropertyEarth.net net rental yield at 6.59%. With that in mind, an investor could generate a rental return of £14,037 over ten years after costs. This would not take into account potential capital growth. In comparison, the 14.6% who would prefer to invest their lump sum in a savings account won’t account for the same payout.

The research also revealed that prospective investors are generally in it for the long haul. Almost 72% considering property as a long term investment. This is quite a bit difference in thinking from the pre-recession ‘get rich quick’ property investment mentality.

Dominic Toller, Managing Director, commented: “This research shows that property is still viewed as a strong long term investment, despite the recent volatility. Savvy finance professionals are taking a long term view and are attracted by the returns currently offered by the buy to let market, due to the low prices and high yields of chain-free property in particular.”

With the huge rise in repossessed properties, banks and building societies have loads of properties on their books to try and get rid off at bargain prices.

Most of us remortgage our homes for better rates and deals – but strangely, few business people consider shopping around for a better commercial mortgage.

The lender will look at your business experience, your business performance trends over the last three years, your current trading position and your plans for spending any cash you raise. You should also expect to have a professional business valuation as well.

Finding the right commercial mortgage at the best rate is the problem. Many business mortgage lenders do not advertise their products and rates and set them according to your business sector and trading performance. The lender will also expect you to share the risk by providing a sizeable deposit of at least 20% of the business valuation.

Approaching a specialist commercial mortgage broker is worth considering. A broker can help you put together a polished finance proposal that makes you look professional to a prospective lender.

Many commercial brokers also have good networking relationships with commercial finance managers and can often negotiate a deal on better terms than a businessman could expect as an offer by walking in off the street.If you are cash-rich and in a position to invest in distressed commercial property – that’s premises where the owner is struggling to meet their financial commitments – then a commercial mortgage specialist can help you put together an investment strategy.

A broker can also help with business finance arrangements – like invoice factoring and discounting and arranging specialist finance to buy equipment and machinery.