Number of mortgages at highest level in three years

The number of mortgage products available to UK mortgage intermediaries is at its highest level since 28 April 2008, figures from Mortgage Brain’s Monthly Product Analysis show.

Mortgage products numbers have increased for the seventh month in a row, rising by 4% in June.

As of 4 July 2011, Mortgage Brain’s mortgage sourcing system listed 12,525 mortgage products – up from 11,996 on 30 May 2011.

Positive movement was seen across the board for all main product types with variable rate loans seeing the biggest rise in product numbers at 21% to now represent 1,500 of all available mortgages.

A 6% increase (180 new products) during June saw the number of trackers climb for the third month in a row to 3,237.

Fixed rate products rose for the fourth consecutive month – by 1% – to their highest level since August 2008 and now represent 7,788 of all available mortgage products.

Over 4,000 new fixed rate products have been introduced to the UK intermediary mortgage market over the past 12 months further cementing them as the market’s most popular and dominant product type.

Mark Lofthouse, CEO of Mortgage Brain, commented: “Further encouraging data has been extracted from this month’s product analysis, which is great news for brokers and the mortgage market as a whole.

“Around 4,500 new products have become available during the past seven months alone and healthy increases across the board has seen the number of fixed, variable and trackers climb to their highest level since the summer of 2008.”

Source: Mortgage Finance Gazette

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House sales and new mortgages up slightly in May, says CML

The number of house sales and new mortgages increased slightly in May, according to the Council of Mortgage Lenders (CML).

Loans for house purchases and remortgaging both grew slightly. There were 41,500 loans for house purchases, up from 40,800 in April, though the total loan value for each month was the same at £5.9 billion. However, despite the increase the amount and levels are still below last years’ levels.

Remortgage lending also increased slightly in May with 29,000 loans advanced, compared to 24,700 in April. Compared to May last year remortgage lending has increased by nine per cent in value, but is still below the peak of March 2011.

Most new borrowers opted for fixed rate mortgages despite the continued low level of interest rates, perhaps because of uncertainty over the future of interest rates and to have the security of fixed payments in a time of rising inflation.

Chris Gardner, a mortgage expert from Obligo said: “The extreme caution of borrowers is highlighted by the popularity of fixed rate mortgages despite the fact that rates are unlikely to rise any-time soon.”

“Many households are in a position such that they cannot even afford to gamble on rates. They have to play a conservative hand and opt for a fix.”

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Minimising risk through a structured approach to self-build lending.

Article by Simon Middleton – June 2011

Self-Build lending is still perceived to be problematic even though it’s one of the largest home building sectors in the UK, ultimately delivering prime market property portfolios.  Issues of planning problems both prior to and during the build project, restrictive covenants, in addition to the usual income and accident related issues and the very nature of the project being undertaken continue to make lenders wary. But that’s not surprising when You consider the rather bespoke requirements of self-build lending are normally shoe horned into the existing home purchase structured product arrangement which relies on the valuation process and doesn’t really provide a thorough risk management approach.

Traditionally self-build customers are released funds based on a series of stage payment mortgages which are valued at stages by the lenders valuation surveyor. Whilst a valuer has good understanding of the construction process and is absolutely key to assessing anticipated final value, they may not have a full understanding of MMC and Ecobuild systems, or how to assess the property for compliance relative to planning permission and building regulations. It is very difficult for a valuation surveyor to provide the stage valuation the Lenders are relying on especially as the stage reached may not be relevant to the actual expenditure made. More importantly it doesn’t control what the self-builder is spending funds on.

A general lack of understanding by the self-builder and the lender of the requirements at this level means that contracts between the self-builder and their contractors or tradesmen are not always used, which increases the risk of the build going over budget and they don’t always utilise Site Insurance or a 10 Year Structural Warranty, all of which can easily be stipulated. For example:- Self–Build Zone have a contract service which caters for the creation of written legal contracts for the whole project and is less than £50.

To provide that increased degree of comfort to lenders then maybe they should be taking a more bespoke approach to lending into the sector as it seems to me that there are already the tools in place with which to adequately risk manage the construction process, it’s just a matter of implementing a standard framework and sorting out the communication between the various tools.

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Grant Shapps calls for more ‘mates mortgages’ to help struggling first time buyers

Housing Minister Grant Shapps will today call on lenders to offer ‘mates mortgages’ so younger first time buyers can club together and take their first step on the property ladder.

With new research published today showing 86 per cent of people want to buy a home, Mr Shapps wants lenders to make it easier for friends who would like to buy a house and can afford the repayments, but are locked out the market by the requirement for a large individual deposit.

For groups of friends without access to the Bank of Mum and Dad, mates mortgages could become a mainstream alternative to years of saving, as well as providing a welcome boost to the housing market.

The Minister wants more lenders to offer straightforward mortgage products such as Britannia’s ‘Share to Buy’, so increasing the number of these schemes that facilitate joint ownership will be the top item for discussion when he meets key housing and mortgage industry figures for a second First Time Buyers Summit.

He will also urge lenders to replicate a new ‘First Time Buyers Pledge’ by Lloyd’s. Under the pledge more advice and assistance will be available to prospective homeowners, including a personal action plan for unsuccessful applicants setting out how they could be successful in the future, and a promise that failed applications will not affect the credit rating of first time buyers.

The summit been arranged by Mr Shapps to review progress since he made a rallying call to the housing industry earlier this year to step their efforts and help more prospective first time buyers fulfil their dream of buying their own home.

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HSBC Bank plc confirms acceptance of the Build-Zone 10 Year Warranty for lending purposes.

The HSBC Risk Management Committee is adding Build-Zone to their list of accepted warranties for new build properties. The leading high street bank has today confirmed their acceptance of the Build-Zone 10 Year Warranty for lending purposes.

The competitive range of structural warranties on offer from  Structural Warranty product provider Build-Zone provide cover for all areas of house building, social housing and commercial development as well as completed and self-build developments.

The Build-Zone Structural Warranty products provide cover against defects in the design, workmanship or materials of building projects.   The wide range of warranty products on offer from Build-Zone will suit most types of development and includes a New Home Warranty which has achieved Designated Warranty Provider status (DWS) in respect of the Warranty link Rule (WLR) by the Department for Communities and Local Government (CLG).  This enables builders and developers to consider the Build-Zone Housing Warranty as an alternative mainstream warranty provider.

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