Mortgage applications up by over 20%

The number of house purchase applications bounced up 20.1% in May compared with April.

But the rebound did little more than counter the 20.9% drop in mortgage applications in April, compared with March.

According to the latest joint mortgage index compiled by Mortgage Advice Bureau and independent London brokers Coreco Group, mortgage applications last month were 20.8% higher than May 2010.

The data only relates to applications, not to approvals.

The average loan size on mortgage applications was £131,426 compared to £124,328 in April, and the average loan to value being sought was 70.4%.

Applications for remortgages rose by 25.5% in May.

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Ex FSA chair McCarthy plans new mortgage business

Sir Callum McCarthy, the former chairman of the FSA, is preparing to launch a new type of mortgage business he claims could kickstart the UK housing market.

The scheme, backed by US private equity firm JC Flowers, would see savers frustrated by low interest rates bankroll first-time buyers struggling to get on the housing ladder, the Sunday Times reports.

New venture Castle Trust would offer homebuyers a 20% deposit to buy a house in exchange for 40% of any profits made on the eventual sale. It would also share in any losses if house prices fall.

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Gross mortgage lending recovers lost ground in May

Gross mortgage lending totalled an estimated £11.3 billion in May, according to new data from the Council of Mortgage Lenders. This represented a 12% increase from the £10.1 billion lent in April and was 1% higher than in May 2010.

Gross mortgage lending includes lending for both house purchase and remortgage. Despite a modest pick-up in overall lending activity during May, lending for house purchase is running below year earlier levels – as April Bank of England approvals data indicate.

Looking ahead, interest in remortgaging is now also likely to be less pronounced, as expectations of higher interest rates this year recede. The MPC once again kept rates unchanged at its June meeting – for the 27th successive month.

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Number of first-time buyer mortgages on the up

The number of mortgages available for first-time buyers has nearly trebled during the past two years, figures showed today.

There are 183 different products aimed at people taking their first step on to the property ladder, up from 62 in June 2009, according to financial information group

First-time buyers have been hit hard by the credit crunch as lenders have become more risk-averse and pulled deals that required little or no deposit.

But there are signs that banks and building societies are tentatively re-entering the market for people with only a small amount to put down, and there are now 31 different loans available for people with a 5% deposit.

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NatWest launches two mortgage deals and cuts rates

The lender is introducing a two-year fixed rate buy-to-let mortgage to its core range, which is available up to 60% LTV at 5.39% with a £999 fee.

It is also launching a fee-free two-year tracker purchase mortgage within its corporate range, which is available up to 60% LTV at a rate of 2.95%.

Furthermore, NatWest has reduced rates on a number of its core range purchase and remortgage products, including its 18-month tracker at 75% LTV, which has been cut from 3.55% to 3.25%.

The lender has also lowered its two-year fix at 75% LTV from 3.94% to 3.65%.

And in its corporate range, NatWest has reduced its two-year fix at 60% LTV from 3.55% to 3.25%, as well as lowering its five-year fix from 4.79% to 4.49%, but the fee on this product has increased from £699 to £999.

Mark Bullard, head of sales at NatWest Intermediary Solutions, says: “The buy-to-let market continues to offer intermediaries opportunities to grow their business, so the new buy-to-let product and lower rates on existing products should provide advisers with more choice.

“We won’t charge brokers’ clients basic legal and valuation fees for a standard remortgage on the new 60% LTV buy-to-let product that we have introduced into our core range.”

Source: Mortgage Strategy

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