Mortgage Broker Manchester

New mortgage advances increased 7% in the third quarter of this year to £40bn, up from £37bn in Q2, according to the latest FSA mortgage lending data. New commitments fell 10% from £40bn in Q2 to £36bn last quarter.
The value of outstanding loans totaled £1.23trn, rising marginally from £1.2trn in Q2.
The average interest rate on new advances increased from 3.78 per cent to 3.89 per cent. There was an increase in the rates for both variable and fixed rate lending. Lending for house purchases accounted for 66% of new advances, rising from 62% in the previous quarter.
The proportion of new lending done at 90% loan-to-value remained at 2% for the third consecutive quarter. The proportion of loans to borrowers with an impaired credit history remained at 0.3%, also for the third consecutive quarter.
In Q3, there were 35,900 new arrears cases. This represents a 4% increase on the 34,400 in Q2. The total number of accounts in arrears at the end of the quarter rose 2% to 303,200, up from 296,500 in Q2. This was 7% less than the 324,300 in Q3, 2011.
The proportion of residential loans in arrears rose marginally from 2.45 in Q2 to 2.46 in the third quarter. The number of new repossessions fell 2% to 8,521 from 8,720.

Sellers dropped their asking prices by 2.6% between October and November although house prices remain 2% higher on an annual basis. The 2.6% fall, equivalent to an average of £6,407, represents the smallest November decline in three years, according to the latest Rightmove house price index. The average asking price of a house now stands at £236,761.
When measured on an annual basis, prices are 2% or £4,617 higher this month, the largest annual rate of increase for November since 2007. Prices are still 0.2% higher even after properties in Greater London are removed from the calculations. Prices in London have risen 8.8% over the course of the year. The Greater London area is the only region of England and Wales where prices rose compared with the previous month, by 1.2%.
Rightmove director and housing market analyst Miles Shipside says there is evidence that more first-time buyers are starting to enter the housing market based on property type sales. He says: “Terraces and flats have increased in price year-on-year more than any other property type. With bottom-end activity a key driver for the rest of the market, this is an indicator of increased activity amongst investors and first-time buyers. In addition, our survey found that 78% of 2013’s intending first-time buyers stated that they have a 10% or greater deposit lined up, suggesting they have adjusted to the new market norms of higher equity requirements.”
The average asking price of a terraced house rose 4.4% on an annual basis to reach £181,633 in November. The price of a flat in England and Wales rose 4.3% over the same period to reach £201,735.

Gross mortgage lending could reach £145bn in 2013 with brokers accounting for a greater proportion of business, says the Association of Mortgage Intermediaries.
The AMI’s quarterly economic bulletin says the FSA’s impending ban on non-advised sales, which will come into force in April 2014 as part of the mortgage market review, along with the government’s New Buy scheme should contribute to a greater proportion of mortgage business going through intermediaries next year.
Sinclair believes lenders will have to adapt to the non-advised sales ban in the coming months, favouring intermediaries as a distribution channel instead of training their own staff to give advice.
In a consultation paper published in December, the FSA proposed that sales must be advised where there is an interaction between the customer and the lender. However, it watered that proposal down in the MMR final rules, published last month, meaning that contract variations such as changing the payment method or rate switches can be carried out on an execution-only basis.

The number of UK borrowers in negative equity has fallen by 100,000 since the first quarter of 2011, from 827,000 to 719,000, says the Council of Mortgage Lenders.
In its fortnightly News and Views letter, the CML says this 13% decline leaves around 10% of borrowers in negative equity when the Halifax House Price Index is used as a benchmark. The analysis measures data up until the end of the second quarter of this year. If the Nationwide House Price Index is used, this figure drops to 5% based on reports of smaller house price declines.
The CML says: “Given the sensitivity of findings on negative equity to the choice of index used, our analysis based on the Halifax [House Price Index] could be seen as a “worst case” estimate. Perhaps, therefore, it would be better to pay more attention to the overall improvement in levels of housing equity, rather than the numbers produced using different indices. “Since house prices started to fall in 2007, different parts of the UK have experienced significantly different price movements. At one extreme, prices in Northern Ireland are now less than half of the 2007 peak. In London and the south east, however, prices have been much more resilient.”

The British Bankers’ Association’s figures for September show gross lending rose by £0.3bn to reach £7.3bn but remained below the six month average of £7.5bn. Net lending rose from minus £0.3bn in August to £03.bn in September.

The number of mortgage approvals reached 62,974, up from 60,119 in August and 2,771 above the six month average. The value of mortgage approvals was £8.1bn in September, up from £7.7bn in August.
BBA statistics director David Dooks says: “The continuing economic uncertainties both in the UK and in the Euro area are having a dampening effect on activity within firms and households. “Households are reducing borrowing requirements and have no appetite to take on more/new debt.

Once, renting a house was the logical way to save up to buy a home of your own – but not anymore.
In fact, it is cheaper to pay a mortgage on a three bedroom house than it is to rent a similar property, a major report reveals today.
On average, a homeowner spends around £130 per month less than a typical tenant who is renting an identical property, according to Halifax. This gap – the largest ever recorded by the bank – means a homeowner is £1560 better off by the end of the year, equal to one month’s take-home pay for the average full-time worker.
And while the homeowner will have shrunk their mortgage during the year by making monthly repayments, the tenant has simply lined their landlord’s pocket. The report reveals how millions of families, young couples and students are being penalised by the highest rents ever charged in Britain.
Meanwhile, homeowners are benefiting from cheap mortgage deals following the Bank of England’s decision to cut interest rates to an historic low in March 2009. The report from Halifax, published today, looked at a three bedroom house, which currently costs £157,400 on average.
For the homeowner, the average monthly mortgage payment, including other ‘buying’ costs, is £600. For the tenant, the monthly rent bill is £732. ‘Buying costs’ are mainly the loan repayments, but also include the cost of household repair bills, minor alternations and insurance. This is a difference of £132, or 8%, the widest gap ever recorded by the Halifax since it started to conduct the annual survey in 2008.

Gross mortgage lending increased to £12.7bn in July, representing a monthly increase of 8%, according to the latest figures from the Council of Mortgage Lenders. This latest figure shows that mortgage lending rose to its highest level since November 2011 when it reached £13.2bn. CML’s market and data analyst Caroline Purdey says: “Gross mortgage lending showed an 8% increase from last month, continuing the see-saw pattern seen throughout this year, albeit against a broadly flat market.
“Interpretation of recent trends continues to be challenged by one-off effects. We look forward to the September figures when the distorting effects of the Diamond Jubilee and the Olympics should largely have worked their way through”
SPF Private Client’s chief executive Mark Harris says: “The Funding for Lending scheme should deliver more competitive mortgage rates in coming weeks and these are already filtering through. We’ve seen five-year fixed rates fall to historic lows and expect more jostling for position in this marketplace.
“This should also lead to an increase in the number of homeowners re mortgaging – an area which has been weak over the past couple of years as borrowers have been happy to sit on their lender’s standard variable rate. Now there is a real incentive for many to take the plunge and re mortgage.”

Gross lending totalled £11.7bn in June, 6% lower than May’s total of £12.5bn and 7% lower than in last June.
But the Council of Mortgage Lenders says that figures show that lending to first-time buyers during the month was at its highest since July 2010 – with the exception of March this year, when first-time buyer activity was boosted by the stamp duty concession.
House purchase lending showed a modest increase in June, with 47,500 loans, worth £7.1bn advanced an increase on the preceding month of 2% by volume and 1% by value. Year-on-year, lending for house purchase was flat, down 1% by volume but up 1% by value. But there was a marked decline in re mortgaging, perhaps driven by expectations that borrowing rates could fall later in the summer.
Borrowers took out 23,400 re mortgaging loans, worth £3.1bn, which was 21% lower by volume and 18% lower by value than in May, and down year-on-year 25% by volume and 18% by value. The CML’s director general Paul Smee says: “Lending figures have see-sawed in the first half of the year, and we may see more fluctuations in the coming months as the effects of the Olympics and other special events in the UK this year are reflected in our lending numbers. “Within that broader context, first-time buyer activity is showing some signs of resilience as we move away from the obvious effects of the stamp duty concession, a trend that it would be good to see maintained.”

SpareRoom.co.uk last week published research showing that nearly half of UK renters cannot afford to save for a deposit. The results of its poll show 42% of respondents say they cannot afford a deposit while 19% say they never envisage getting on the property ladder.
Among the 35% who have started to save for a deposit, almost half have less than £5,000. The average amount saved is £12,125 – just 7.3% of the average UK house price of £165,738.
The director of SpareRoom Matt Hutchinson says: “What is clear is that something has to change. House prices need to fall, mortgage lenders need to offer more assistance to first-time buyers with higher loan to value mortgages and the Government has to accept there is a need for more affordable housing to purchase and affordable rental properties available privately or through housing associations.”
One in five UK renters spent two-thirds of their take-home pay on rent. Graduates additionally find their efforts to save for a deposit hampered by student loan repayments as 48% still have outstanding university debts of more than £10,000.
Meanwhile, LSL Property Services published its latest buy-to-let index which showed that UK rents neared record high levels in June, displaying a pace of annual inflation that now matches UK CPI at 2.4%. Month-on-month rents rose by 0.9% to £718 per month in June. A record high of £720 per month was last reported in October 2011.
But as a result of the monthly rise, the pace of annual rental inflation also increased, climbing to 2.4%. LSL Property Services’ commercial director of comments David Brown says: “The sheer weight of tenant demand continues to push up rents across the country. Lending criteria remains tight and the number of mortgages given to first-time buyers – especially those without substantial deposits – is still a long way from the level seen before the credit crunch.”
“With higher rents and the growing cost of living eroding how much tenants can save towards the large deposits required to buy, it’s no surprise to see the private rented sector swelling by 262,000 households a year.”