The latest figures released by Britain’s Council of Mortgage Lenders show that  property lending in Britain in January was more than one-fifth lower as compared to the same period at the same time last year, with loans also falling to a decade-low figure. Total gross lending dropped to £9.1 billion in January, which represents a 32% drop from the figures seen in December 2009, and the figures were also 21% lower than the figures seen in January last year. At the same time, lending levels fell to their lowest point seen since the beginning of the new century.

According to the Bank of England in a separate release, lenders have also reported that Britain’s extreme weather conditions towards the end period of 2009 and the beginning of 2010 had helped to lower mortgage approval levels in January. The CML stated that the larger than usual fall between the months of December 2009 and January 2009 confirmed that house buying activity was helped during December by a wave of borrowers looking to push their purchase through to beat the end of the stamp duty holiday.

The CML’s figures also revealed that there had been a 56% hike in mortgage advances for those properties affected by the changes to stamp duty in December 2009, a figure far higher than the 11% rise seen by the rest of the property market. The CML has predicted that the early period of 2010 is likely to witness a drop in activity levels due to the fact that more mortgage deals were concluded during the final period of 2009, as well as the uncertainty created by the coming British General Election in the Spring.

Paul Samter, an economist at the Council, added that the rather turgid recovery as well as debt market uncertainties probably meant that the housing market could only really expect a gradual recovery. Due to the fact that the banks will have to refinance around £300 billion of wholesale funding  next year it is thought likely that funding costs will rise which could have the effect of curtailing lending to businesses seeking commercial mortgages and households looking for new or re-mortgages.

New research looking into the mortgage markets has indicated that mortgage lenders are currently floating as many as six different versions of each of their key mortgage deals onto the market – even before any change of rates dependant upon the size of an individual’s deposit or how much equity they have. One example of this is Halifax’s three-year tracker deal, with a rate that is set at the Bank of England’s base rate plus 2.44% through until 2013. Such a rate reels people in as they see best-buy comparisons and adverts in today’s difficult climate. However, working out specific eligibility for this deal is exactly where confusion begins.

In order to qualify for this best deal rate borrowers will need a minimum of 40% equity if you are already a Halifax borrower as well as if you pay a fee of £999. Those who are not existing borrowers but instead have Halifax currents accounts will pay the base rate plus 2.76% as well as a £4 fee discount. For those who are neither borrowers of current account holders with the Halifax must pay the base rate plus 3.09% and can then also save £4 on the fee. The fee can also be cut to £495, however this will result in a rise in the interest rate to as much as 3.39% over the base rate depending on where your current mortgage and current account are held. Further, the definition of current account is not the Standard account but rather the Reward current account. This account demands a regular monthly payment of £1,000.

Other lenders are also undertaking similar practises, among them Northern Rock and Nationwide, with Nationwide charging different rates depending on just how the application is made. For example, applications through the website can be as much as 1% lower than through the branch. Whilst lenders argue that they are attempting to offer maximum choice to enable as many people eligibility as possible brokers state that the ensuing confusion can prove extremely expensive for borrowers attracted by low rates who are subsequently then offered a far less agreeable rate. As an example, even an extra 0.5% on the rate will mean an additional £42 per month payment on a £145,000 repayment mortgage. Because of this borrowers are advised to shop around and treat adverts with healthy scepticism, particularly if looking for deals on bad credit or re-mortgages with less-than-ideal histories.

According to a new survey by by the Co-operative Bank, one of the UK’s leading commercial so-called ‘ethical’ banks, almost two-thirds of mortgage customers in the UK have genuine ambitions to be free of their mortgage commitments before or at least when they get to fifty years of age, revealing that around 62% of those responding to it the were aiming for this goal. The report also hinted at interesting additional information in respect of what such mortgage freedom might have on British people’s lifestyles, and the research and responses suggest that the impact would be significant indeed.

As an example, over half of respondents (some 52%) said that they would in the event that they were mortgage free take more holidays each year, whilst a little under a third would look to increase their savings considerably. Also, 27% of those questioned told questioners that in the event that they were able to become mortgage-free they would examine ways in which they could fundamentally alter the way in which they work and their working patterns. They would look to do this by switching to part-time hours in some cases and by quitting work altogether in others.

Head of mortgages at the Co-ooperative, James Hillon, commented on the survey, saying that ‘The research clearly indicates that many mortgage holders are seeking to take the best advantage of the continuing low interest rate levels by making overpayments on their mortgages’ in addition to locking in reasonable fixed-rate mortgages and even utilising re-mortgages to clean up old residual debt to help put them in a better position to pay off all mortgage debt at a later date. Also, according to recently released figures from the Bank of England, mortgage customers that are on tracker products are currently enjoying mortgage rates that stand at their lowest levels since 1997. The figures state that, with the base rate of interest still remaining at 0.5%, the average tracker mortgage rate stood at 3.63% which compares very favourably with the figure of 3.92% that was recorded in December 2009.

If you are struggling with getting your mortgage under control you can start to regain some power in your life by writing a monthly budget as well as looking at what options are available to you. Although UK mortgage fees may have risen considerably in the past few years despite historically low interest rates and considerable high levels of mortgage market competitiveness this does not mean you have no power on your side. Many UK mortgage lenders, for instance, are more and more open minded as of late to those people who may have bad credit histories or are simply looking at a helpful alternative to what they are currently facing in the market. UK mortgage protection insurance available in most areas can even help provide you with a valuable safety net to land on as well if you ever suddenly find yourself unemployed due to illness or injury – or even simply a company restructuring.

Many options today such as adverse credit remortgages (also known as bad credit mortgages), self employed, self certification or remortgages are all recently being seen available in the various UK mortgage sectors to help those in need. The mortgage market currently also looks set to improve offerings available to borrowers as new, cheap mortgage deals become open to help finance and support your particular conditions. This is particularly important now as the bank of England has recently decided to maintain the low base rate for mortgages for the next few months and will not increase rates until the following year.

This does not mean that the sector will say positive forever, however, as recent concerns over the ability for the mortgage market to keep up towards the end of 2010 are raising ever since Mr. King from the Bank of England announced that the Bank is not looking to continue the same low rate mortgage offerings into the following year, thus potentially solidifying the current 300bn debt facing the mortgage market into a difficult hurdle to pass. Still, in the meantime home owners and prospective buyers alike can continue to take advantage of the mortgage offerings available until that occurs and should look towards locking in a good fixed rate before it’s too late.

The giant Spanish banking group, Santander, is looking to further its expansion in the UK after posting huge profits in a British market where the group currently hands out half of all new mortgages. The Spanish giant’s mortgage lending share peaked at over 20% during the final three months of 2009, and its red, flaming logo began its sweep up and down the British high street and among various advertising platforms. The net lendings of Santander came to £7.6 billion in 2009, a figure that is reckoned to amount to half the net lending of the market in its entirety. The bank’s overall market share for 2009 stood at 18.6%, with a gross mortgage lending figure of £26.4 billion. Analysts at Santader believe these figures – especially those relating to market share – are their highest ever.

Satander now ranks as the UK’s third-largest bank in pure deposit terms, after RBS and Lloyds. This rapid jump in rank came principally after its acquisition of both Bradford and Bingley and Alliance and Leicester. The group now derives 16% of its total profits from the UK market, and has plans to expand still further after the Chairman Emilio Botin announced that the bank had posted 2009 profits in Britain totalling £1.5 billion, a rise of 30%. Senor Botin stated during Santander’s annual profits presentation that he would look to also take the SME business sector as Santander looks to ‘grow organically’ in the UK.

Currently, Santander is believed to be among the parties looking into acquiring the former Williams and Glyn’s branch network that current owners RBS will put  on the market next year. The network concentrates mainly on small business and commercial banking. Santander is also currently involved in discussions aimed at expanding in China and is looking at offering a wider range of overseas mortgages in various areas, although such discussions are believed still to be at a preliminary stage.

As far as the British market is concerned there is no doubt that Santander has benefited greatly from the collapse of its British rivals, most of which have paid for their past dealings in the highly risky investment banking sector which Santander avoided and therefore did not see the so-called ‘toxic’ losses witnessed by many of the British and other European  banks.

According to the British Council of Mortgage Lenders (CML), the government will need to reform the way in which lenders raise funds in order to prevent house buyers facing difficulties finding competitively priced mortgages. The Council of Mortgage Lenders postulated that a funding gap of around £300 billion will appear when the current government-run support schemes finish in 2014. The funding gap is basically the difference between the sum house buyers wish to borrow and the actual funds available to them and is expected to remain large thanks in part to many bad credit mortgages and low-value re-mortgages offered as a result of the long-standing economic depression..

The housing market, therefore, faces major uncertainty as to how mortgage lenders will replenish the £300 billion potential shortfall-if indeed they will be able to. Industry analysts and insiders believe that what is needed is a new policy approach formulated to stimulate the development of wholesale funding. Many caution that, unless this happens, there is likely to be a long-term fall in the amount of choice for mortgage customers in the UK, and that without such new government support, establishing a sustainability market on the scale needed to fill the upcoming funding gap could be extremely problematic.

Such a scheme may well involve wrapping up and repacking existing mortgages in order to sell them as interest-bearing bonds. The bonds would be sold to institutional investor, thereby raising funds for new lending. Firms might be left reliant on continued government funding, with the UK risking facing a real credit undersupply, leading to the rationing of mortgages for customers for a protracted period of time, according to the CML. Many, including the Council of Mortgage Lenders, believe that, even if the wholesale markets began working properly again on the scale previously witnessed ore 2007, which many analysts believe to be rather unlikely, considerable uncertainty would exist as to whether or not lenders would be able to repay the full extent of government funding. It seems highly likely, therefore, that there will need to be an extension of the current period of government support.

The CML also stated that the remarkable reduction in levels of competition in UK mortgage markets is one of the results of the fact that wholesale debt markets were closed in 2007. Added to this, the emergency government measures to close the concomitant gap, despite being largely welcomed, focused largely on those taking bigger deposits which adds to the general lack of competition in the market.

New figures have shown that the number of mortgage approvals fell in the UK in December 2009, to the surprise of industry  insiders, as it is the first fall in these figures for more than a year. Many analysts believe that this could signal the inability of the housing market to keep up the momentum of its current recovery. The figures show that over 59,000 loans were granted to borrows by lenders in order to buy homes. This figure compares to just over 60,000 in November 2009, according the figures from the Bank of London. The Bloomberg News Survey forecast had previously predicted an increase to almost 62,000. Some have speculated that, despite the fact that house prices rose for a straight sixth month in January,  mortgage figures are a sign that housebuying may begin to wane. Analysts also cite the fact that credit is still not widely available, particularly for those seeking bad credit mortgages or other risky re-mortgages, and the concomitant terms and conditions are likely to be off-putting to many. The household sector still carries a large burden in terms of the wider economic recovery, and with projected cuts in public spending by the government, labour markets could suffer, causing obvious knock-on effects to sectors like the housing and mortgage markets. November 2008 was actually the last time we saw a drop in the number of home-loan approvals in the UK, although overall mortgage lending rose in December, to a figure of £13.5 bn, up from £12.7 bn in November, according to figures from the Bank of England.

House prices also increased in January, although analysts have cautioned that further house prices rises may well be curtailed if wage rises are not forthcoming as a result of a strengthening economy. It is feared that the rapid recovery in house prices is very much a one-trick pony with very little meat behind it. Consumer confidence, however, saw a rise in January-the first time this has happened in three months, as optimism for economic recovery grew. This may be due in part to the fact that Britain’s fourth quarter figures for 2009 saw a 0.01% rise, inching the UK out of its longest recession in history. However, M4, which measures money supply, fell by its largest ever margin of 1.1% in December 2009, underscoring problems with credit and lending and fears for continued recovery in the UK property market.

A recent report published by charities has criticised mortgage lenders for neglecting to explore all possible means of keeping people living in their homes in at least one-third of repossessions. According to legal rules in the UK, mortgage lenders should only use repossession as a last resort; however, according to the recent study published by Advice UK, Citizens Advice and Shelter, judges do not always get involved in order to see that the protocol is observed.

The report did also indicate that there were certain support packages available that were having an effect for struggling homeowners. Another factor that has kept the repossession rate down is the continuation of low interest rates.

During November 2009, the Council of Mortgage Lenders reduced its forecast for the number of properties likely to face repossession this year to just under 50,000, having previously predicted that home repossessions would climb steeply to around 75,000.

The charities concluded that the sub-prime lenders, who tend to specialise in packages for riskier borrowers, were, in general, taking legal action for repossession earlier than the mainstream mortgage lenders.

The two most common factors cited for going into mortgage arrears were unemployment or a drop in income level, with low-income families being the most vulnerable to the spectre of repossessions, according to the charities’ figures.

They did cite certain government packages aimed at helping with mortgage interest bills, with one such scheme being the Support for Mortgage Interest scheme (SMI). The scheme is directed at those who have been made unemployed, and becomes available 13 weeks after the claim is made for mortgages of up to £200,000.

The charities say, however, that a lot of mortgage borrowers ending up in court tend to be paying higher monthly interest rates than could be covered by the payments under the SMI scheme. They also stated that evidence existed showing a shortfall in those applying for this particular form of benefit. Homeowners are instead encouraged to lock-in a relatively low interest fixed rate mortgage if possible in order to take advantage of the benefits available to them now rather than risk a higher interest mortgage that may put them out of a home later, even if it may offer them greater monetary gain initially.

Also, recent date published by the FSA illustrated that, in the third-quarter of 2009, the number of repossessions actually increased when compared to the past three months, with the number of new repossessions reaching 14,000, marking a 2.8% increase on the past three month. This was, however, still 5% below the apex at the beginning of 2009, and the figure continued to fall by 10% from July to September when compared to the previous quarter. The figure stood at 46,000.

Recently released figures for mortgage lending in November 2009 showed that mortgage lending dropped by 10% from October 2009 to reach trough figures not seen since May of the same year, according to lenders. During November 2009, gross lending for mortgages reached a total of £12 billion, a figure down 14% on the previous November, according to the figures from the Council of Mortgage Lenders (CML). The Council stated that, previously, lending for home loans has seen a steady rise throughout the autumn of 2009, and that November’s month-on-month drop was not only due to seasonal factors. The Council explained that a slight seasonal decline from October to November was quite usual, however the seen 10% fall was greater than normal and greater than had been expected.

Paul Samter, an economist with CML believes that despite the blip the watchword for the long-term was stability and this should not be affected by the end of the holiday on stamp duty which will happen soon.

Britain’s Chancellor of the Exchequer, Alistair Darling, announced in the recent pre-Budget report that the 1% stamp duty would kick in for properties fetching more than £125,000 from the end of the year. Mr Samter believes that market conditions and figures suggest that we can expect little underlying change in the coming months, with the only possible changes being a slight drop in underlying house buying in the first part of 2010 as a result of the end of the stamp duty holiday.

Mr Santer also suggested that the market shows very little encouragement for first-time buyers, who will still be required to hand over large deposits in order to get their feet on the property ladder.

Despite the recent slight increase in mortgage credit availability, including several higher loan-to-value mortgage products coming back onto the market. There appears however to be no rapid recovery with respect to lending volumes, as re-mortgaging levels look likely to stay subdued due to continuing low interest rate levels.

The National Association of Estate agents also announced recently that the ratio of first-time buyers coming into the housing market is at a year’s low. Analysts described the housing market as a principle factor in terms of economic recovery in the UK, and that the unchanged squeeze on lending, as well as the probability that prospective buyers would be unlikely to make major purchases as a General Election looms make a continued subdued housing market most probable during 2010.

It has been revealed that two out of every three properties that have been repossessed by the State-owned lender Northern Rockwere funded by one of the lender’s own-and much criticised-Together Mortgages. Gary Hoffman, Northern Rock’s chief executive, addressed Members of Parliament on January 11, confirmed that his company’s Together Mortgage packages, which enabled borrowers to assume mortgage loans worth in excess of 125% of the total value of their properties, did indeed account for the larger-than-usual number of loan arrears and cases of repossession currently being experienced by the bank.

Mr Hoffman went on to state that 4.11% of all Northern Rock related borrowers were found to be three months in mortgage arrears as of September 2009, particularly those who have had bad credit in the past or were looking for a higher rate on their home through a re-mortgage, compared with the Council of Mortgage Lenders’ industry average figure of 2.5%.

The bank’s arrears, now positioned within Northern Rock Asset Management (NRAM), actually stabilised during the second half of 2009. NRAM is the so-called ‘bad bank’ that was created when Northern Rock was divided as the extent global banking crisis in the UK began to come to light.

Mr Hoffman stated that the level of arrears came as no surprise, ‘given what the book is’, and that the company’s Together package had been fully discussed and evaluated. He said that, in total, Together’s arrears stand at 6.89%, and, as it result, it was clear that Together was the factor driving the high figure.

Mr Hoffman also insisted that Northern Rock has worked stringently in order to improve the number of mortgage defaulters able to remain in their properties (known as ‘forebearance’), as well as striving to improve debt management. Mr Hoffman informed the Treasure Select committee, in frot of whom he was appearing, that currently 90% of all mortgage accounts held within Northern Rock Asset Management are performing well, arguing that Northern Rock is happy for those customers in arrears to keep their current mortgages with the company, and that although NR might not be the most affordable choice with respect to mortgage costs it was also by no means the most expensive.