Recent reports show that while fewer people have fallen into arrears with their mortgage provider throughout the UK a strong number of core households remain and are likely to remain in the future. The second quarter of 2010 saw an overall reduction in the number of households throughout the country falling into arrears, dropping total numbers to roughly 9,400. This is a decent improvement over 2009’s second quarter figures of 11,800 and even the first quarter figures of 9,800.

Still, many experts anticipate the total number to remain roughly the same in the near future, nether increasing nor decreasing substantially in the months to come. This prediction is based upon the fact that the low mortgage rates being offered by most lending institutions continue to help individuals keep their mortgage payments under control while at the same time allowing individuals ranging from first-time buyers to even those holding a bad credit mortgage to manage their funds accordingly.

While the economy as a whole is also generally being seen to be on the rebound in recent times and therefore hold the potential for short-term arrears reduction many experts also feel that this is not actually likely to be a sustainable trend as far as the real estate market is concerned and do not anticipate much impact upon arrears in the coming few months. In a longer term perspective, on the other hand, this may actually prove to be a valid recovery period that will allow many individuals to recover due to personal hardships over the past few months or years.

Unfortunately for many this recovery is generally seen by most as dependent upon whether or not the central banks continue to maintain their historically low interest rate, meaning that if inflation were to become too out of hand or other factors affect the economy too much in any number of ways the interest rate could be raised and many people may simply revert to previous conditions.

A new study indicates that Britons are more likely to stick with their current account provider for longer than they are with their personal partner. In fact, on a nationwide scale Britons tend to spend an average of roughly 16.5 years with the provider of their current account, compared to a mere 14.1 being spent with their partner according to recent Santander research reports.

In terms of bank loyalty these figures do vary somewhat from region to region, with the South East of the UK coming in with average figures averaging 17.7 years of loyalty to their current account provider per customer. The North West, on the other hand, provides the opposite story of a smaller (but still impressive) 15.3 year average per consumer.

Many people feel that this trend is a result of a long-standing idea amongst consumers that, despite what most logic would argue, it is easier for an individual to file for divorce than to change their current account holder. This is even true in today’s market where many different financial institutions tend to offer highly competitive deals, especially in terms of the property market that is driving many consumers’ decisions due to the continued low mortgage rates offered by many groups for a variety of consumers ranging from first-time buyers to even re-mortgagers and general investors.

For many banks this news comes as somewhat mixed, being happy to retain legacy consumers for long-term profits of their own while at the same time being posed with a new challenge of attempting to convert consumers from other banking establishments to join them. Whether or not they can be particularly successful with the conversion is still up for debate given the highly volatile nature of the market at the current stages, but many people anticipate many banks revising their conversion strategies to become even more competitive in the future in the hopes of encouraging the switch and establish a larger customer base.

Recent reports from the Council of Mortgage Lenders has indicated that lending numbers are on the rise once again, with the latest figures in July showing an increase to an impressive £13.6 billion over June’s £12.9 billion – a good 5% increase month-on-month. While this is still somewhat shy of last year’s figure of £14 billion in July it is still a positive sign for many, particularly for those who have been concerned somewhat recently about a looming crash just around the corner for the property market as a whole.

The recent rise in lending is seen to keep things on track with the Council’s earlier estimate that roughly £140 billion worth of lending will take place throughout the course of the year, though many people are still somewhat concerned over the slightly decreasing numbers while looking at a year-on-year perspective. The Council, on the other hand, feels that these concerns while valid are nothing to take too closely to heart as a large number of property owners continue to handle their funds adequately thanks in no small part to the continued low mortgage rates made possible by the Bank of England, thus allowing both the residential and commercial mortgage sectors to recover somewhat.

The recent cooling in terms of the substantial gains in some areas has also worked to the advantage of many local residents as overseas investment is dying down somewhat, with many investors looking to other areas for additional investment opportunities rather than staying within UK limits. This has caused many people to move to the South American and Asian markets in particular where large growth trends have been seen in a number of areas and allowed many local UK markets to handle more local matters independently.

As many prospective home owners and even current landlords know all too well, the potential to have real estate funded is many times based upon the overall price index for a current area and whether or not that index is showing positive or negative trends over time. What many people do not know, however, is that there is not one but in fact several indexes referenced by various lending institutions at any given time, with each index based upon different market criteria ranging from registered house prices to survey results gathered over months and years.

Given the large range of potential criteria for each index a recent investigation has begun looking into the actual index usages by various lending institutions in order to determine just what is and is not taken into consideration in many cases. This has become a particular concern for many home owners and prospective home owners alike in recent months as house prices continue to fluctuate and many first-time buyers look to establish themselves in the market.

Should an investigation prove successful and help establish a more centralized index this could be good news for many individuals involved in the real estate industry, allowing a greater number of individuals to have access to the lowest mortgage rates possible in their area should the price index reflect positively and accurately at that time. This would apply to both tracker mortgages and fixed-rate mortgages as well, meaning that many owners will be better able to lock-in decent rates for an extended period of time to leverage their personal funds to the best of their own ability.

The review of the indexes used nationwide is currently being undergone by the National Statistician and is focusing particularly on those indexes generated by the Communities & Local Government department as well as the Land Registry in order to target the largest index reference points possible at this time.

According to the latest figures from the Council of Mortgage Lenders, gross UK property lending for June was up by 15% on May’s figures, although lending remains at an extremely low level and there appears to be no real increase imminent – not highly positive news for many keeping an eye on many fixed-rate mortgages, tracker mortgages and even buy-to-let mortgage offerings. June saw an estimated £13.1 billion loaned as compared to May’s figure of £11.4 billion. June’s figure is also 7% up on the figure for June 2009, although lending for the first half of this year reached a total of £65 billion, a figure  that remains unchanged from figures for the first half of last year.

According to Paul Samter, economist with the Council of Mortgage Lenders, the higher figures, despite being good news, represent a time for cautious optimism.

‘Our gross lending estimate of £13.1 billion in June represents a seasonal pick-up and is higher than June last year, but is still indicative of low levels of activity,’ he said.

‘There are signs of house prices stabilising and more properties coming onto the market following the abolition of home information packs. This may improve liquidity in the market, but transaction levels are subdued and likely to remain so while access to credit remains constrained,’ Mr Samter explained.

It appears, however, that any significant short-terms improvement is unlikely to materialise:  ‘The FSA has outlined a clear direction of travel as part of its mortgage market review. The consultation paper on responsible lending increases the regulatory burden on lenders and could make it harder for borrowers to access credit,’ warned Mr Samter.

Adam Challis, the head of research at Hamptons International, believes that the rescinding of the controversial Home Information Packs has aided the slight improvement in lending figures, along with a greater number of new mortgage products being made available.

Many also feel that practical solutions are also required to stimulate and encourage banks to fund mortgage lending. This problem is particularly acute as the Special Liquidity Scheme is set to reach its repayment phase in early 2011. At this point, banks will face real challenges to their will and ability to fund mortgage lending.

The financial watchdog in the UK is looking to ban both fast-track mortgages and self-certification as parts of its drive to ensure that lenders implement and undertake affordability checks on borrower before lending them money in order to buy properties. The steps are intended to ensure that borrowers will actually be able to pay back he money they borrow and their suitability for loans.

Fast-track mortgages and self-certification have long been the choices of self-employed property purchasers, however, under the new proposals released for consultation by the Financial Services Authority (FSA), they would be required to give proof of income that would need to come from an independent source as well as ensure that they will not fall under a bad credit category.

The FSA has proposed to introduce affordability tests for every mortgage in order to make sure that lenders return to what has been called “the basics of responsible lending.’ The authority did not illustrate precisely what criteria  should be used in order to gauge the mortgage affordability borrowers by the lenders. Instead, they stated that they might decide to undertake a ‘line-by-line’ assessment of each applicant’s outgoings. They could also decide to use either their own expenditure models or statistical data.

Affordability, however, should be based upon repayment mortgages instead of interest-only deals and should also factor in future interest rate rises based upon the term of a 25-year mortgage-even in the event that a loan has been taken out for a longer period of time.

The FSA also stated that those lenders lending to individuals with poor credit histories would need to implement stricter credibility tests and also to make certain that they had a buffer between income and outgoings. The FAS’s research indicates that borrowers with poor credit histories were much more likely to encounter repayment difficulties.

The research also shows that almost half of all mortgages instigated between 2007 and the initial quarter of 2010 were approved without the need for buyers to provide verification of their income. Also, it showed that some 46% of households taking out mortgages between 2005 and 2008 have either no money left or faced a financial  shortfall after making mortgage payments and meeting monthly living expenses.

It seems as though fixed-rate mortgages are likely to make a comeback in terms of popularity in the wake of one of the UK’s top lenders raising the cost of its standard variable rate for new customers. Customers that are coming to the end of current mortgage deals with Cheltenham & Gloucester and Lloyds TSB Scotland, which are part of the Lloyds Banking Group, will be pushed onto the higher variable rate of 3.99% rather than the current SVR when their current deals expire. The higher rate guarantees to stay within 2% of the base rate in regards to both residential and commercial offerings.

It has been usual for borrowers to switch to their lender’s SVR at the end of their fixed-rate deals, and many have chosen to remain on such rates since the Bank of England cut interest rates to 0.5% in March 2008.

The percentage of borrowers on fixed-rate mortgages stood at its lowest rate for five years as of March and April, according to figures released by the Council of Mortgage Lenders. The figures also show that SVRs remain cheaper than fixed rates in general.

Lloyds’ SVR guarantee means that its 2.5% rate is currently the cheapest rate going, and borrowers have certainly made the most of it by sticking to it for the long haul. Lloyd’s, however, are set to introduce the new Homeowner Variable Rate this month, and the new rate will come into effect on June 1st, 2010 for those new customers taking Lloyds’ shortest fixed deal lasting for two years. The rate will not affect either existing customers or Bank of Scotland customers, as the BOS has its own SVR which stands at 4.84%.

Similar proposals were adopted by Nationwide and several other small building societies last year. It is widely thought that other providers will soon follow.

It may well be that the gradual drop in cost of fixed-rate mortgages may hasten a return back to fixed rates, which are currently at their lowest for 15 months. The average fixed-rate deal for two years now stands at 4.61% as compared to its peak level of 5.21% since base rates reached their trough.

New research indicates that between the marked low and high points experienced by the real estate market in the UK, property values fell from month to month, thereby eating into the deposits and equities held by many owners in their home or homes.

Many in the industry often suggest that homeowners that are simply not interested in liquidating their properties see house price variations and fluctuations are irrelevant. Instead, the actual value of their property and what it is worth – irrespective of whether or not they are looking to sell – is always the focus of great interest. This factor is also of great relevance for those home owners looking to find a reasonable re-mortgage for their houses, as the value they will be able to get for their property will depend greatly upon the total amount of home equity they have.

New research from HSBC, however, indicates that house prices fluctuations may be very relevant indeed. Between September of 2007 and April of 2009 where the market saw high and low points for house prices in the UK, the values of properties dropped, month-on-month, thereby eating away at deposits and equities held by owners across the country in their homes. The figures come from the Land Registry.

Despite the fact that lenders throughout the country have always offered varied levelled mortgage rates in terms of both tracker and fixed-rate offers to their customers with varying levels of equity held in their homes, recent house price volatility as well as what is seen as the associated risk attributed to approving a mortgage for customers at a high loan to value amount has led to an ever-growing gap between rates actually on offer to house owners with small and large deposits.

As a result whether or not a homeowner is looking to sell their property taking the current market conditions into account the amount of real equity they hold in their homes is more important now than ever before -particularly for those homeowners looking to re-mortgage.

Mortgage lending has risen by roughly 25% in March over February figures, though quarterly trends are still less than ideal in many developers’ eyes. While March still showed a 45% increase on the year-on-year rates in terms of mortgages approvals the actual quarterly figures dropped from 171,000 at the end of 2009 down to a mere 112,000 for the first quarter of 2010.

The significant drop in mortgage approvals after December of 2009 is primarily attributed to the ending of the Stamp Duty holiday in January, with the re-instatement of the holiday for all first-time buyers purchasing a home valued £250,000 or less as well as the continual drop to record low mortgage rates for home purchases helping to buoy the overall market at the start of the year.

On a positive note the recovery trends for the mortgage sector have continued to show positive growth rates for the ninth month in a row, showing constant solid growth domestically as opposed to a mere increase in overseas investment in the local real estate sector. This is a strong sign of recovery as stated by many experts as the continued growth of real estate has helped encourage many areas that have been facing particular hardship in recent months realize a much greater than expected turn around.

Commercial property has also seen a positive boost in recent years with many sectors showing positive rates in both investment interest as well as mortgage offerings in various areas. This has been a concern in past months when the commercial sector has shown particular weakness in developing itself and both overseas and domestic investors were losing confidence in many major commercial developments. Even London’s Canary Wharf at one point was facing a near collapse as commercial property values plummeted and debt skyrocketed in the wake of the economic impacts carried around the world, yet recovery trends are showing hope after all in recent days.

Interest-only mortgages may soon be a thing of the past according to recent studies of the mortgage lending industry. While it may have been true that as early as a few short months ago making a change from a repayment mortgage to an interest-only mortgage (where monthly payments are substantially reduced as lenders need only pay for the interest accumulating on the loan) could have been done with either a quick phone call or the click of a mouse borrowers are finding it harder and harder to make the switch today.

The reason for this trend is due to the fact that while many borrowers may find interest-only mortgages appealing – especially due to the steady low mortgage rates offered by many lending institutions today – they are in fact extremely dangers from a number of perspectives. Borrowers taking out an interest-only bad credit mortgage, for instance, will only put themselves into greater debt while paying back a loan that had no principal reduction plan in place. Instead of helping to get themselves out of a high-debt burden they are instead working to put themselves even further into a difficult to recover from situation.

While it’s true that some lending companies today are still offering interest-only mortgages for some loans due to the inherent troubles associated with them they have been receiving somewhat of a makeover. Halifax, for instance, the nation’s leading mortgage provider, requires that interest be paid at 0.2% higher on an interest-only fixed-rate mortgage that is set at decent levels – requiring the borrower to already have a substantial financial base to begin with when applying for the loan in the first place.

Other lending organizations are simply not allowing borrowers to take out interest-only loans as the still unstable property market is causing many loans to be risky initially without adding to their potentially dangerous nature. For lending institutions this means greater security that may in turn be passed down to mortgage holders, though for borrowers it may mean the loss of a useful tool that could help them out in dire straights they may find themselves in otherwise.