Tag Archives: lending
Mortgage arrears and repossession downs in the UK, latest data shows
The proportion of UK mortgages in arrears or ending in repossession fell in the first quarter of this year, according to the latest figures from the Council of Mortgage Lenders. A decline was experienced in all arrears bands, and across both owner occupier and buy to let lending. The total proportion of all mortgages with arrears equivalent to more than 2.5% of the mortgage balance was 1.03% at the end of the first quarter, down from 1.05% in the fourth quarter of 2014, and well down on the 1.24% recorded at the same time last year. In numerical terms, there were 113,900 loans in arrears. Of these, just 24,400 were in the most severe arrears band at more than 10% of balance, equating to 0.22% of all mortgages. This is the smallest number and proportion of mortgages in the most serious arrears band since the end of 2008. The proportion of mortgages resulting in repossession in the first quarter was 0.03%, down from 0.04% in the fourth quarter of 2014 and 0.06% in the first quarter of last year. The number of repossessions was 3,100, down from 4,200 in the fourth quarter of last year, and 6,400 in the first quarter of 2014. ‘Although complacency would be misplaced, the underlying picture continues to be one of improvement and a continuing reduction in mortgage arrears and repossessions,’ said CML director general Paul Smee. ‘The message remains the same: don't delay in contacting your lender if you are experiencing temporary payment problems, as lenders want to help you resolve them, and will only take possession of property as a last resort,’ he added. Meanwhile, the latest figures from the Finance and Leasing Association (FLA) show that the number of second charge mortgage repossessions fell 45.3% in the first three months of 2015, compared with the same period last year. ‘Second charge repossessions are continuing to fall as second charge lenders continue to do all they can to help customers in financial difficulty,’ said Fiona Hoyle, head of consumer credit at the FLA. Continue reading
Buy to let lending outpacing residential loans, new analysis suggests
Buy to let lending in the UK increased by 20% year on year in the first three months of 2015, outpacing residential lending which was up by just 1.6%, a new analysis shows. Total lending for the quarter stood at £36.2 billion, a year on year increase of 5.4%, according to an analysis report from Equifax Touchstone which covers 92% in the intermediated lending market. The data also shows that the average value of each mortgage was £177,060 for residential compared to £170,730 in the final quarter of 2014, and £151,033 for buy to let compared to £145,017 in the previous quarter. March was the top sales month for mortgage brokers in eight years. Lending was up 24.3% on February 2015, reaching £15 billion. The market saw UK wide improvement with only two postcode areas, Perth and the Western Isles, reporting negative growth during the period. However, despite growing lending levels, the number of active brokers in the market has fallen in the last 12 months, down from 8,288 in the first quarter of 2014 to 8,028 in the first quarter of 2015. The firm says that this market consolidation makes it even more important for mortgage providers to identify which networks and firms are leading the charge and successfully responding to the rapidly changing mortgage landscape and the requirements of the Mortgage Market Review. ‘In March we saw lending power ahead and the sluggish trend witnessed at the end of last year has been reversed. There have been lingering doubts over the market recovery and it is encouraging to see such positive growth,’ said Iain Hill, Equifax Touchstone relationship manager. ‘While traditional savings accounts continue to offer low returns, savers are looking for alternative ways to invest their money, prompting substantial growth in the buy to let market. An oversupply of people and an undersupply of homes makes buy to let an attractive proposition and we expect this trend to continue to gather pace over the coming months,’ he added. Separate research by Paragon Mortgages has revealed that intermediaries are writing more mortgage business with longer term initial rates. The results from the specialist lender’s quarterly intermediary tracking survey for the first quarter of 2015 shows 30% of cases were for terms of five years or more trackers and fixed rates, up from 26% in the previous quarter. At the same time, there was a reduction in two and three year terms, dropping from 71% to 66% and intermediaries have reported a decline in popularity of tracker rate products since the middle of 2012. Survey results showed a continuous fall from the third quarter of 2012 to the second quarter of 2014. However, this trend appears to be shifting, with tracker products accounting for 18% of cases in the first quarter of 2015 compared to 15% in the previous quarter. Despite the modest improvement in the sale of tracker products, fixed rates continue to be the most popular with intermediaries recommending a… Continue reading
UK election not harming house price sentiment, latest index suggests
Households in the UK perceive that the value of their home rose in April despite the uncertainty being created by the country’s forthcoming general election, the latest sentiment index shows. Some 20.9% of the 1,500 households surveyed across the UK said that the value of their home had risen over the last month, while 4.5% reported a fall, according to the House Price Sentiment Index (HPSI) from Knight Frank and Markit Economics. This gave the HPSI a reading of 58.2, the 25th consecutive month that the reading has been above 50 and a slight increase on last month’s reading of 57.5, suggesting that households believe prices continued to rise in spite of the uncertainty surrounding the outcome of the election. ‘The outcome of the election may be uncertain, but there are some key factors underpinning house prices at present. Confidence in the economy continues to grow while the cost of living has stopped rising,’ said Grainne Gilmore, head of UK residential research at Knight Frank. ‘Mortgage rates have dipped to a new low, making owning a home for those who can clinch a mortgage deal cheaper than at any time before. The cost of buying a home for the majority of purchasers has also fallen after the reform of stamp duty in December last year. A lack of supply of homes for sale in recent months has also boosted prices,’ she explained. The future HPSI, which measures what households think will happen to the value of their property over the next year, also rose in April to 70.2, up from 69.6 in March and the highest reading so far this year. According to Tim Moore, senior economist at Markit, the UK housing market showed resilience in the face of upcoming election uncertainty, with April’s survey highlighting the first back to back monthly rise in house price sentiment for almost a year. ‘Reduced pressure on household finances, improving labour market conditions and low mortgage rates continued to support house price sentiment in April. However, stretched affordability and tighter lending conditions are keeping a lid on house price momentum,’ he said. He pointed out that on a regional basis, people living in the East of England are the most likely to anticipate rising property values over the next 12 months, followed by those living in the South East. Meanwhile, the gap between UK wide house price growth expectations and those in the capital fell to its joint lowest since the start of 2011. The report also shows that some 6.5% of UK households said they planned to buy a property in the next 12 months, up from 5.7% in March. On a regional basis, nearly one in 10 households in Wales is planning a purchase in the next 12 months, followed by those in the East of England where 9.5% of households said they would be buying a property in 2015. Individuals aged between 25 and 34 are more likely to be considering buying a home in… Continue reading
