Mortgage News

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  • loanarranger
    started a topic Mortgage News

    Mortgage News

    The following article has appeared in one of the Mortgage Trade journals reporting on views expressed by the Association of Mortgage Intermediaries an influential trade body within the mortgage industry.

    "Mortgage rates are likely to rise in the first quarter of 2016 as lenders look to rein in their lending before the Mortgage Credit Directive comes into force in March, the Association of Mortgage Intermediaries has predicted.
    The trade body’s Quarterly Economic Bulletin also forecasted the first Bank of England base rate to take place in 2017 unless wage growth accelerates in the New Year.
    AMI predicted gross lending of £212bn in 2015, which would represent a £9bn increase from the 2014 total of £203bn.
    The bulletin read: “Ahead of the Mortgage Credit Directive… in order to manage pipeline some lenders may increase rates to slow application flows.
    “If this were to coincide with strong wage growth, it could bring forward the need for a wider rise in interest rates, meaning a rise in Bank of England base rate.”
    AMI raised concerns on lenders failing to make use of transitional rules, adding that the Financial Conduct Authority needs to intervene for the good of customers.
    The trade body wrote cautiously on the so-called buy-to-let crackdown, as landlords will have to pay a 3% stamp duty surcharge from March 2016 in measures announced by Chancellor George Osborne in the Autumn Statement.
    The bulletin added: “Just a third of all transactions involving a landlord purchasing a property to rent privately are funded using a mortgage. The remainder are cash purchases.
    “We would question whether caps on buy-to-let lending will therefore have the desired effect of cooling investment into the UK’s private rented sector.”

  • loanarranger
    replied
    In response to your original note, I suspect that BM Solutions like the majority of lenders operating in the BtL sector are seeking ways to stimulate further business at a time when the bulk of such applications are Remortgage as opposed to purchase applications. Although a modest increase itis a welcome change to their criteria.

    Leave a comment:


  • loanarranger
    replied
    Thanks for providing clarification, I was posting from briefing notes received whilst on holiday in Switzerland.
    As an aside yesterday I had a Boletus Rosti very tasty !

    Leave a comment:


  • boletus
    replied
    Originally posted by loanarranger View Post
    BM Solutions have announced that providing an applicant owns no more than 10 BtL properties.
    Point to note, it is no more than 10 mortgaged properties (arbitrarily irrespective of low LTV's). Unencumbered properties are not included in the limit but they are taken into assessment.

    Leave a comment:


  • boletus
    replied
    Originally posted by loanarranger View Post
    BM Solutions have announced that providing an applicant owns no more than 10 BtL properties they will now consider up to a maximum of 5 properties in mortgage with BM Solutions within the Lloyds Bank Group.
    I wonder how they have come up with these seemingly arbitrary numbers?

    Why the jump from 3 properties to 5? What happened to 4?
    Why 10 properties? Why not 11 or 9?
    Why the max lending increase from £2M to £3M? Why not £2.8M or £3.1M?

    The Lloyds/HBOS group is huge, this seems to me a one size fits all, computer says "no" type announcement.






    Leave a comment:


  • loanarranger
    replied
    BM Solutions have announced that providing an applicant owns no more than 10 BtL properties they will now consider up to a maximum of 5 properties in mortgage with BM Solutions within the Lloyds Bank Group. Certain conditions in aggregate borrowings will apply.
    As a broker I consider this change to be long overdue but very welcome as I am sure will borrowers who had possibly been restricted to 3 properties.

    Leave a comment:


  • jpkeates
    replied
    Just worked out that the total payments on 5 properties will be lower than the payment on 4 properties three years ago.
    That's been some drop in rate, given that there's more than 25% more being funded.

    Leave a comment:


  • loanarranger
    replied
    A very shrewd move JP. Strike whilst the iron is hot.

    Leave a comment:


  • jpkeates
    replied
    I have brought forward my funding!

    Leave a comment:


  • loanarranger
    replied
    Buy-to-let mortgage rates have fallen as the choice of products has grown, research claims.

    Analysis of the deals on offer from lenders including Barclays, BM Solutions, RBS, The Mortgage Works, Godiva and Precise found the average rate on a £150,000 buy-to-let mortgage has dropped across both short and long term periods.

    The research, by online broker Property Master, shows the biggest fall in the monthly cost was for five-year fixed rate buy-to-let mortgage at 75% LTV, which fell by £36 in one month.

    Five-year fixed rates for 65% LTVs also fell by £6 per month.

    Two-year fixed rate buy-to-let mortgages for 50% and 65% of the value of a property fell by £5 each, while those at 75% LTV were down by £8 per month.

    Angus Stewart, chief executive of Property Master, said: “We have been tracking buy-to-let mortgage interest rates in this way for 18 months and we have never seen before a fall across the board in this way.

    “It is quite unprecedented. [In June] we saw a drift upwards in the cost of buy-to-let fixed rate mortgages but it may be that the market is now expecting rates generally to fall rather than rise.”

    “It is likely that lower rates are also being fueled by the continuing increase in the number of buy-to-let mortgage product

    “Whilst it is true some lenders have exited the market others are boosting their range and competing hard for new business.

    “As landlords continue to be pressed on all sides by rising regulatory cost such as the new Tenant Fees Act and falling tax reliefs, today’s news of a lowering of mortgage costs will be very much welcomed.”

    It comes after Moneyfacts reported that thenumber of buy-to-let mortgages on the market had hit the highest level since 2007.

    Leave a comment:


  • loanarranger
    replied
    What goes up Can come down

    An interesting article has appeared today in a Finance Trade publication which may be of interest.


    Prices almost flat in June: Nationwide

    Average house prices across the UK were almost flat in June with an increase of just 0.5 per cent on last year to £216,515, while London saw another decline, Nationwide Building Society’s latest index has shown.

    Prices in the capital were down by 0.7 per cent to £465,722 for the three months to June compared to the same period last year, which was below the previous quarter’s annual fall of 3.8 per cent.

    But Nationwide points out that London prices are still only around 5 per cent below the all-time highs recorded in 2017 and about 50 per cent above their 2007 levels, while UK prices are 17 per cent higher over the same period.

    Northern Ireland posted the strongest performance this quarter with an annual increase of 5.2 per cent, bringing average prices to £143,343.
    In Wales prices rose by 4.2 per cent to £160,407 and in Yorkshire and the Humber prices were up 3 per cent to £158,780.
    Nationwide chief economist Robert Gardner says it was the seventh consecutive month in which UK annual house price growth remained below 1 per cent.

    He says: “Survey data suggests that new buyer enquiries and consumer confidence have remained subdued in recent months. “Nevertheless, indicators of housing market activity, such as the number of mortgages approved for house purchase, have remained broadly stable.”

    He adds: “While healthy labour market conditions and low borrowing costs will provide underlying support, uncertainty is likely to continue to act as a drag on sentiment and activity, with price growth and transaction levels remaining close to current levels over the coming months.”

    Garrington Property Finders managing director Jonathan Hopper says: “London’s market is turning into a supernova. After years of burning with stellar brightness, its slowdown is now exerting a gravitational force on the national average.
    “That gravity has even turned the South East’s markets inside out – with the outer London boroughs and the commuter belt now suffering the sharpest price falls while central London values settle.”

    But he says the price correction is prompting increasing numbers of buyers to take the plunge, providing a boost to activity.
    He adds: “From a price point of view, the national picture is getting more polarised, not less.
    “In the weakest markets we’re seeing homes change hands for as much as 30 per cent below guide price, while in the hottest areas, premiums being paid over guide price are not unusual for the most sought-after homes.
    “In the Southeast, what sellers there are tend to be those who have no choice but to put their home on the market – and as a result many are having to recalibrate asking prices or accept low offers.”

    Leave a comment:


  • loanarranger
    replied
    Thanks JP.

    Leave a comment:


  • jpkeates
    replied
    Originally posted by loanarranger View Post
    Thanks for the responses which seem to be well read but seldom commented on.
    It's essential reading, but there's rarely much to say in response.

    Thanks for the updates, they're a great source of knowledge.


    Leave a comment:


  • loanarranger
    replied
    I agree that if the rate is fair for you and the reversionary rate etc are good then certainly that should be what is needed to go ahead.

    Thanks for the responses which seem to be well read but seldom commented on.

    Leave a comment:


  • jpkeates
    replied
    I'm seriously considering bringing forward an equity release mortgage I'd planned for 2020.
    The deals are good and I can't see them being able to improve much further.

    Leave a comment:

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