A top business leader has joined those warning against new curbs on mortgage lending. Sir Richard Lambert, outgoing director-general of the CBI, cautioned against proposed changes which stem from the Mortgage Market Review being carried out by the Financial Services Authority. Sir Richard commented, “This is not the right time in the house building cycle to be making mortgages harder to obtain.” His remarks echo those of both industry insiders and politicians – including housing minister Grant Shapps.
Archive for January, 2011
Voices Raised in Support of Mortgage Market
Tuesday, January 25th, 2011Borrowers Watch Rates With Interest
Tuesday, January 18th, 2011More figures point to a livelier picture in parts of the mortgage market. According to Surveyors Connells, December saw an 88 per cent increase in the number of valuations for remortgaging, compared with 2009. Buy-to-let activity has also seen significant growth.
First time purchases, and borrowing by those moving home, remain pretty much in the doldrums by comparison.
The new enthusiasm for buy-to-let properties is being put down to the availability of more attractive mortgage deals, coupled with rising rents. Remortgaging is being boosted as homeowners take a hard look at their current arrangements – with many taking advantage of increased competition among lenders, or seeking to secure the benefits of today’s low interest rates by fixing their repayments.
Meanwhile, the debate about the future path of interest rates is hotting up, with Ernst & Young’s influential Item Club warning that an early rise in rates would risk derailing the recovery. Chief economic advisor Peter Spencer reckons inflation will fall of its own accord, as the VAT increase and other one-off factors drop out of the figures in a year’s time.
The comments come in the wake of an intervention from David Cameron, which seemed to imply that the Bank of England had been at fault in allowing inflation to rise to its current levels.
Room For Improvement As Remortgaging Rises
Tuesday, January 11th, 2011Could remortgaging help you make the most of your property in 2011?
Latest Bank of England figures show a marked rise in the number of homeowners seeking remortgage funds. The Bank’s quarterly Credit Conditions Survey also suggests that borrowing for house purchase has fallen – although demand remains healthier than in the depths of the recession.
A number of factors explain the increased interest in remortgage deals. Some commentators argue that fears about rising interest rates in 2011 are causing many of us to review our mortgage arrangements – perhaps with a view to securing a fixed-rate deal at today’s competitive rates. And the uncertain outlook for house prices means that homeowners are choosing to stay put, and make use of some of the equity they have built up in their homes – rather than go to the trouble and expense of selling up.
One option here is to fund home improvements. An extra room can make an existing property more viable, whether by the addition of an en-suite bathroom, a loft conversion or annex, to help accommodate a growing family or an elderly relation. Furthermore, according to major lenders such as the Halifax and Nationwide, such additions can boost the value of your home considerably, if and when you do come to sell.
A reputable broker such as Go Remortgage can help you review your existing mortgage deal in detail – and so get the maximum benefit from your property in 2011.
End to Housing Boom and Bust?
Tuesday, January 4th, 2011Housing minister Grant Shapps has caused a stir with his call for stability in house prices. In radio and press interviews, he suggested it was “crazy” that so many found putting a roof over their head unaffordable. The Tory minister described a “rational” housing market as one in which prices rose by 2 per cent a year, with wages rising by 4 per cent.
With the Royal Institution of Chartered Surveyors predicting that prices will stay broadly flat this year, such views may turn out to be not that wide of the mark. Whether governments can stop the big rises, and occasional falls, typical of the UK property market is another matter.
Of course, ministers do influence property prices – by their approach to house building and planning rules for example. But the desire of so many of us to become homeowners is the big factor.
Another of Grant Shapps’ interventions has received less attention, but could prove more important to those seeking mortgages, or remortgage deals. The minister is due to meet FSA-chief Hector Sants to discuss the financial watchdog’s mortgage proposals. Signs are that the government agrees with those who think that FSA plans to tighten rules on lending risk overkill.
Critics have argued that, with lenders already imposing their own curbs, more obstacles for borrowers are the last thing anyone needs. Shapps told the Financial Times that it would be a mistake to “bolt the door” given the correction which had already occurred in the housing market.
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