Mortgage lending bounced back during August after being negative for the first time on record during July, according to the latest figures from the Bank of England (BoE).
Net lending - which does not take into account redemptions and repayments - rose by £0.7bn in August- the highest level since February.
The rise comes after homeowners repaid £203m more than was advanced during July. However the twelve-month growth rate continued to fall by 0.1% to 0.8% and the three-month annualised growth rate remained at 0.2%.
Within total secured lending, secured lending by banks excluding the effects of securitisations increased by £2.7bn, above the £2.3bn increase in July.
The number of house purchase approvals stood at 52,317, in line with the July figure and above the previous six-month average. However, both remortgaging approvals and loans approved for other purposes fell.
Remortgaging approvals dropped to 29,059 from July's figure of 33,880 and loans approved for other purposes totalled 26,256.
Simon Rubinsohn, chief economist at Royal Institution of Chartered Surveyors (RICS) said it is re-assuring the negative reading recorded in July proved to be a one-off.
He added: "Mortgage demand is continuing to grow relatively strongly. However, it is not just the scarcity of mortgage finance which is making it difficult to satisfy this demand. The lack of appropriate properties on the market is compounding the problem by leaving prospective buyers with little real choice in some parts of the country."
Source
Monday, December 28, 2009
Tuesday, December 15, 2009
Mortgage approvals dip in August
The number of mortgage approvals for homebuyers dipped slightly in August, but net lending rose to its highest level since February, according to Bank of England figures published today.
A total of 52,317 mortgages were approved for house purchases during the month, down from 52,404 in July but above the previous six-month average of 45,787.
Net lending on mortgages, which takes into account repayments and redemptions, rose by £1bn in August after falling into negative figures in July when repayments outstripped borrowing for the first time since records began. The number of approvals for remortgaging continued to fall from 33,880 in July to 29,059, and was lower than the previous six-month average of 32,130.
Commenting on the figures Howard Archer, chief economist at IHS Global Insight, said: "While housing market activity has been lifted by the still significant fall in house prices from their 2007 peak levels and low mortgage interest rates, the upside continues to be limited by unfavourable economic fundamentals and tight credit conditions.
"At 52,317 in August, mortgage approvals for home purchases were still well below the average monthly level of 93,400 reported by the Bank of England since 1993. Mortgage approvals above 70,000 to 80,000 are generally seen as consistent with rising house prices."
Brian Murphy of the Mortgage Advice Bureau said the fall in approvals for purchases reflected "normal seasonal activity". "The fall in remortgage numbers are due to a combination of factors – seasonality, the lack of products on the market and fixed rates that still remain unattractive at higher loan-to-values (LTVs).
"For many homeowners the monetary advantage they might gain from switching from a lender's standard variable rate (SVR) to a fixed-rate product is not compelling enough to remortgage. Standard SVRs are around 4.6% at the moment and the typical two- and five-year fixed rates can't match this, unless homeowners are able to remortgage at 60%-65% LTV."
Separate statistics published today by the Building Societies' Association (BSA) showed that repayments continued to outstrip borrowing in the mutual sector. Consumers repaid £655m more than they borrowed in August, the BSA said.
Gross lending by UK building societies in the month stood at £1.5bn, while mortgage approvals totalled £1.3bn.
Adrian Coles, BSA director general, said: "Gross lending was subdued in August but appears to be at broadly similar levels to recent months after seasonal factors are adjusted for. However, the market remains very depressed compared to previous years.
"Despite signs of a modest improvement in market conditions in recent months, activity will not return to normal levels until funds for mortgage lending are more widely available to building societies and other lenders."
Meanwhile, the Bank of England's statistics also showed that repayments outstripped borrowing on net lending through credit cards, loans and overdrafts for the second month in a row as consumers continued to concentrate on clearing debt. Borrowers paid back a record £309m more than was lent in unsecured loans during August.
Source
A total of 52,317 mortgages were approved for house purchases during the month, down from 52,404 in July but above the previous six-month average of 45,787.
Net lending on mortgages, which takes into account repayments and redemptions, rose by £1bn in August after falling into negative figures in July when repayments outstripped borrowing for the first time since records began. The number of approvals for remortgaging continued to fall from 33,880 in July to 29,059, and was lower than the previous six-month average of 32,130.
Commenting on the figures Howard Archer, chief economist at IHS Global Insight, said: "While housing market activity has been lifted by the still significant fall in house prices from their 2007 peak levels and low mortgage interest rates, the upside continues to be limited by unfavourable economic fundamentals and tight credit conditions.
"At 52,317 in August, mortgage approvals for home purchases were still well below the average monthly level of 93,400 reported by the Bank of England since 1993. Mortgage approvals above 70,000 to 80,000 are generally seen as consistent with rising house prices."
Brian Murphy of the Mortgage Advice Bureau said the fall in approvals for purchases reflected "normal seasonal activity". "The fall in remortgage numbers are due to a combination of factors – seasonality, the lack of products on the market and fixed rates that still remain unattractive at higher loan-to-values (LTVs).
"For many homeowners the monetary advantage they might gain from switching from a lender's standard variable rate (SVR) to a fixed-rate product is not compelling enough to remortgage. Standard SVRs are around 4.6% at the moment and the typical two- and five-year fixed rates can't match this, unless homeowners are able to remortgage at 60%-65% LTV."
Separate statistics published today by the Building Societies' Association (BSA) showed that repayments continued to outstrip borrowing in the mutual sector. Consumers repaid £655m more than they borrowed in August, the BSA said.
Gross lending by UK building societies in the month stood at £1.5bn, while mortgage approvals totalled £1.3bn.
Adrian Coles, BSA director general, said: "Gross lending was subdued in August but appears to be at broadly similar levels to recent months after seasonal factors are adjusted for. However, the market remains very depressed compared to previous years.
"Despite signs of a modest improvement in market conditions in recent months, activity will not return to normal levels until funds for mortgage lending are more widely available to building societies and other lenders."
Meanwhile, the Bank of England's statistics also showed that repayments outstripped borrowing on net lending through credit cards, loans and overdrafts for the second month in a row as consumers continued to concentrate on clearing debt. Borrowers paid back a record £309m more than was lent in unsecured loans during August.
Source
Saturday, November 28, 2009
Mortgage approvals remain steady
Mortgage approvals remained in line with July volumes last month, the latest figures from the Bank of England reveal today.
Some 52,317 loans were approved in August, down slightly on the 52,404 approved in July, but up on the 49,938 approved in June and above the previous six-month average of 45,787.
The value of loans approved last month was £7.2bn, up on the £6.6bn and £7.1bn reported in June and July respectively.
Remortgaging loans volumes declined from 33,880 in July to 29,059 last month, with the value down from £4.4bn to £3.8bn. The six-month average was 32,130 loans with a value of £4.1bn.
Overall, total net lending to individuals increased by £0.7bn last month, in line with the previous six-month average. The twelve-month growth rate continued to fall, by 0.1 percentage points to 0.8%, and the three-month annualised growth rate remained at 0.2%.
Source
Some 52,317 loans were approved in August, down slightly on the 52,404 approved in July, but up on the 49,938 approved in June and above the previous six-month average of 45,787.
The value of loans approved last month was £7.2bn, up on the £6.6bn and £7.1bn reported in June and July respectively.
Remortgaging loans volumes declined from 33,880 in July to 29,059 last month, with the value down from £4.4bn to £3.8bn. The six-month average was 32,130 loans with a value of £4.1bn.
Overall, total net lending to individuals increased by £0.7bn last month, in line with the previous six-month average. The twelve-month growth rate continued to fall, by 0.1 percentage points to 0.8%, and the three-month annualised growth rate remained at 0.2%.
Source
Sunday, November 15, 2009
Mortgage lending sees first significant growth since 2007
House purchase lending showed its first material annual growth for the first time since 2007 this July.
The Council for Mortgage Lenders (CML) has revealed that despite the number and value of remortgages remaining low compared to July 2008, the number of house purchase loans increased to 56,000, which is a 24 per cent increase on the previous month and a 19 per cent rise since July 2008.
However, despite gross mortgage lending now totalling £14.5billion, with house purchasing loans accounting for more than 50 per cent of this total, following the second successive increase in two months, the total remains 42 per cent lower than in July last year.
Since July 2008, the number of remortgage loans has fallen by 53 per cent to 41,000, while the value of remortgage loans has seen a 61 per cent fall in the same period.
According to the CML, the number of fixed rate mortgage taken out in July was at its highest level since June 2007, as more than three quarters of borrowers chose to lock in to a fixed rate, taking advantage of an average rate of 4.7 per cent, which is below the overall decade average of 5.6 per cent.
However, despite the increased activity in the mortgage market, Paul Samter, CML economist believes there are still some restrictions on lending activity, he said:
"It's tempting to call the turn in the mortgage market at this point, and there is certainly concrete evidence that lending for house purchase is increasing. But there are still constraints affecting the lending industry's capacity to fund increased lending, as well as less consumer motivation to remortgage for the time being.
"The overall lending picture is likely to stay relatively subdued for some time, especially as the wider economy is far from robust as yet," he added.
Source
The Council for Mortgage Lenders (CML) has revealed that despite the number and value of remortgages remaining low compared to July 2008, the number of house purchase loans increased to 56,000, which is a 24 per cent increase on the previous month and a 19 per cent rise since July 2008.
However, despite gross mortgage lending now totalling £14.5billion, with house purchasing loans accounting for more than 50 per cent of this total, following the second successive increase in two months, the total remains 42 per cent lower than in July last year.
Since July 2008, the number of remortgage loans has fallen by 53 per cent to 41,000, while the value of remortgage loans has seen a 61 per cent fall in the same period.
According to the CML, the number of fixed rate mortgage taken out in July was at its highest level since June 2007, as more than three quarters of borrowers chose to lock in to a fixed rate, taking advantage of an average rate of 4.7 per cent, which is below the overall decade average of 5.6 per cent.
However, despite the increased activity in the mortgage market, Paul Samter, CML economist believes there are still some restrictions on lending activity, he said:
"It's tempting to call the turn in the mortgage market at this point, and there is certainly concrete evidence that lending for house purchase is increasing. But there are still constraints affecting the lending industry's capacity to fund increased lending, as well as less consumer motivation to remortgage for the time being.
"The overall lending picture is likely to stay relatively subdued for some time, especially as the wider economy is far from robust as yet," he added.
Source
Wednesday, October 28, 2009
Mortgage lending market stabilising
According to the latest data from the CML (Council of Mortgage Lenders) the mortgage lending market is showing signs of stabilising.
However, whilst it’s encouraging to see some positive signs for the mortgage market, it is still weak and is improving from very low levels.
Mortgage lending was up 23% in June compared with May. But at 45,000 house purchase loans this is still half the average number of June loans over the last 7 years.
Remortgages increased by 13% to 34,000 loans in June.
Overall though the second quarter saw a 21% fall in remortgages compared with the first quarter. This being the result of low interest rates reducing the demand for remortgaging.
Fixed rate mortgages took up 78% of new mortgage lending in June, although this is considered to more supply driven than anything else.
CML economist Paul Samter commented ‘Low interest rates and realistic selling prices have helped generate a welcome increase in transactions.’
He added ‘There are tentative signs that lending criteria are easing, but remortgaging demand is likely to remain subdued whilst interest rates stay at current levels.’
Source
However, whilst it’s encouraging to see some positive signs for the mortgage market, it is still weak and is improving from very low levels.
Mortgage lending was up 23% in June compared with May. But at 45,000 house purchase loans this is still half the average number of June loans over the last 7 years.
Remortgages increased by 13% to 34,000 loans in June.
Overall though the second quarter saw a 21% fall in remortgages compared with the first quarter. This being the result of low interest rates reducing the demand for remortgaging.
Fixed rate mortgages took up 78% of new mortgage lending in June, although this is considered to more supply driven than anything else.
CML economist Paul Samter commented ‘Low interest rates and realistic selling prices have helped generate a welcome increase in transactions.’
He added ‘There are tentative signs that lending criteria are easing, but remortgaging demand is likely to remain subdued whilst interest rates stay at current levels.’
Source
Thursday, October 15, 2009
MOODY'S WARNS ON REMORTGAGE ARREARS RISK
Remortgage cases have been labelled as an “adverse loan characteristic” by Moody’s Investors Services alongside high LTVs and self-cert products.
The ratings agency has published a special report today on ‘What drives UK mortgage loans to default’ based on Moody’s performance data from UK residential mortgage-backed securities master trusts and prime transactions.
It found that certain loan types and characteristics increase the likelihood of missed payments.
Jonathan Livingstone, Moody’s analyst and co-author of the report, says: “These
include high LTV loans, loans to self-employed borrowers, self-certified products or loans without full income verification due to the fast track process, buy-to-let loans, interest only loans, and remortgages.
“The performance of loans with these adverse characteristics will continue to be closely assessed to ensure that the adjustments assumed in the rating analysis reflect the credit risk of these loans.”
Other adverse characteristics noted by Moody’s include borrowers close to retirement age, loans on high value properties and properties without full internal valuations.
Moody’s says the risk of arrears with these loan characteristics is at the moment only slightly higher than loans without these criteria.
But the rating agency says the default rate could grow for these loan types if the recession deepens.
Source
The ratings agency has published a special report today on ‘What drives UK mortgage loans to default’ based on Moody’s performance data from UK residential mortgage-backed securities master trusts and prime transactions.
It found that certain loan types and characteristics increase the likelihood of missed payments.
Jonathan Livingstone, Moody’s analyst and co-author of the report, says: “These
include high LTV loans, loans to self-employed borrowers, self-certified products or loans without full income verification due to the fast track process, buy-to-let loans, interest only loans, and remortgages.
“The performance of loans with these adverse characteristics will continue to be closely assessed to ensure that the adjustments assumed in the rating analysis reflect the credit risk of these loans.”
Other adverse characteristics noted by Moody’s include borrowers close to retirement age, loans on high value properties and properties without full internal valuations.
Moody’s says the risk of arrears with these loan characteristics is at the moment only slightly higher than loans without these criteria.
But the rating agency says the default rate could grow for these loan types if the recession deepens.
Source
Monday, September 28, 2009
Slight Hope Appears In the UK Remortgage, Mortgage And Loan Market.
The UK economy, as has much of the world economy,has been in a state of near collapse, now ther is a slight glimmer of hope.
The UK economy has been in the biggest and deepest economic downturn in living memory. Many secured loan lenders have gone to the wall. Banks have been taken over and others have been nationalised. Record losses have been announced by The Lloyds Banking Group and RBS. Millions of people throughout the civilized world have been thrown on the unemployment scapheap due to redundancy. Firms in the manufacturing industry in general and the motor manufacturing industry in particular have seen their jobs go down the drain. It seems that we have all been living in the midst of an extremely dark cloud of such a magnitude and density that it has been impossible to escape from. House prices have plummeted, and if you require to sell your property it has been a slow and painful process.
Many homeowners who really have had to move house because of their job being relocated have been forced to rent out their property, because selling it was impossible. Buyers who may have been interested have sometimes found it impossible to obtain a mortgage to fund the purpose. Individuals who could well have benefitted from obtaing a loan have found it extremly difficult and in some cases an impossible oal to achieve.Loans of all types have decreased whether it is a personal loan, a homeownerloan, a debt consolidation loan, etc. etc. Buying a property for first time buyers whose dream it is is to get their foot on the first rung of the property market has remaind exactly that, namely just a dream. Most mortgage lenders have restricted their maximum LTV to 70% for first time buyers making it virtually impossible for young people to acquire their first property as they would require a deposit a deposit of over £30,000 to buy a property at £100,000, and this is blow the average UK house price of over £150,000. What young person has £50,000 approximately available for a propoerty deposit? Now ther are slight signs of improvement. Some lenders have slightly relaxed their criteia for loans, mortgages and remortgages, such as Blackhorse slackening off their LTV for their secured loan product from 70% LTV to 80% LTV. Foreign banks such as the Bank of China has opened four branches in the UK in London, Manchester, Birmingham and Glasgow. This all shows signs of things moving in the right direction.However even these foreign lendres are being cautious with, for example, The bank of China insisting that to be granted a mortgage with them, you are required to call in at one of their branches for an interview. This is the way mortgages, loans and remortgages used to be dealt with before it was mortgages and loans galore. Nevertheless we can now hope to see things continuing to improve.
Source
The UK economy has been in the biggest and deepest economic downturn in living memory. Many secured loan lenders have gone to the wall. Banks have been taken over and others have been nationalised. Record losses have been announced by The Lloyds Banking Group and RBS. Millions of people throughout the civilized world have been thrown on the unemployment scapheap due to redundancy. Firms in the manufacturing industry in general and the motor manufacturing industry in particular have seen their jobs go down the drain. It seems that we have all been living in the midst of an extremely dark cloud of such a magnitude and density that it has been impossible to escape from. House prices have plummeted, and if you require to sell your property it has been a slow and painful process.
Many homeowners who really have had to move house because of their job being relocated have been forced to rent out their property, because selling it was impossible. Buyers who may have been interested have sometimes found it impossible to obtain a mortgage to fund the purpose. Individuals who could well have benefitted from obtaing a loan have found it extremly difficult and in some cases an impossible oal to achieve.Loans of all types have decreased whether it is a personal loan, a homeownerloan, a debt consolidation loan, etc. etc. Buying a property for first time buyers whose dream it is is to get their foot on the first rung of the property market has remaind exactly that, namely just a dream. Most mortgage lenders have restricted their maximum LTV to 70% for first time buyers making it virtually impossible for young people to acquire their first property as they would require a deposit a deposit of over £30,000 to buy a property at £100,000, and this is blow the average UK house price of over £150,000. What young person has £50,000 approximately available for a propoerty deposit? Now ther are slight signs of improvement. Some lenders have slightly relaxed their criteia for loans, mortgages and remortgages, such as Blackhorse slackening off their LTV for their secured loan product from 70% LTV to 80% LTV. Foreign banks such as the Bank of China has opened four branches in the UK in London, Manchester, Birmingham and Glasgow. This all shows signs of things moving in the right direction.However even these foreign lendres are being cautious with, for example, The bank of China insisting that to be granted a mortgage with them, you are required to call in at one of their branches for an interview. This is the way mortgages, loans and remortgages used to be dealt with before it was mortgages and loans galore. Nevertheless we can now hope to see things continuing to improve.
Source
Tuesday, September 15, 2009
Mortgage, Remortgage and Homeowner Loans Should Rise Due To The Increase In House Prices.
After a dire two years in the housing and financial markets in the UK, the gloom is hopefully set to receed a little.
After two years of near despair in the UK housing, mortgage, remortgage and loan markets, the increase in house prices for the last three months in a row hopefully
heralds an improvement of the finance market in general House prices rose by 1.6% between May and June of this year, and although it means that prices are 10.7% lower than they were a year ago, the fact that the increases are in three consecutive months does allow some hope of stability.
The increase has been partly due to shortness of supply. Many builders of new properties have either completely ceased building new properties or have very much cut back on the number of new houses they are building. The construction industry is at its lowest ebb since 1948 which is a lifetime ago.Another reason for a lack of properties for sale is because meny homeowners are staying put in their current properties for a variey of reasons such as fear of redundancy, fear of not obtaining a mortgage for a new propety, etc.The increase in property prices, and the greater availability of mortgages should give people the confidence to again apply for remortgages, loans, mortgages, etc., and as such hopefully will ive an ever so gemtle kick start to the ailing economy.
After two years of near despair in the UK housing, mortgage, remortgage and loan markets, the increase in house prices for the last three months in a row hopefully
heralds an improvement of the finance market in general House prices rose by 1.6% between May and June of this year, and although it means that prices are 10.7% lower than they were a year ago, the fact that the increases are in three consecutive months does allow some hope of stability.
The increase has been partly due to shortness of supply. Many builders of new properties have either completely ceased building new properties or have very much cut back on the number of new houses they are building. The construction industry is at its lowest ebb since 1948 which is a lifetime ago.Another reason for a lack of properties for sale is because meny homeowners are staying put in their current properties for a variey of reasons such as fear of redundancy, fear of not obtaining a mortgage for a new propety, etc.The increase in property prices, and the greater availability of mortgages should give people the confidence to again apply for remortgages, loans, mortgages, etc., and as such hopefully will ive an ever so gemtle kick start to the ailing economy.
Friday, August 28, 2009
UK Mortgage Lending Rises
LONDON (AP) -- Britain's housing market is slowly stabilizing, though activity is still low compared to previous years due to the recession, industry bodies said Tuesday.
The Council of Mortgage Lenders said gross mortgage lending in the United Kingdom rose by 23 percent in June compared to the previous month but still lagged at about half of year-ago levels.
The trade association for the mortgage lending industry said there had been 45,000 house purchase loans for a total of 5.9 billion pounds ($9.7 billion) in June -- up from 36,500 loans in May.
Government statistics showed that house prices rose 2.6 percent in the quarter ending June 2009, after falling 3.8 percent in the quarter ending March 2009.
While that left average house prices 10.7 percent lower than last year, the overall rate of the fall has slowed from a 12.7 percent year-on-year fall in May, according to data released by the Communities and Local Government Department.
Council of Mortgage Lenders economist Paul Samter said low interest rates and realistic selling prices had helped house sales, but added ''there is some way to go before we reach normal levels of activity.''
There were 34,000 remortgage loans -- loans taken out against existing property -- approved in June. That was 13 percent higher than the previous month but still lower than normal. There were 96,000 remortgage loans approved in the second quarter of the year -- 21 percent lower than the previous quarter.
First time buyers appear to be re-entering the market, taking out a total of 17,200 loans with 1.9 billion pounds in June, up from 13,700 loans in May but down from 18,400 in June 2008. The typical buyer has a 25 percent deposit-- a level unchanged since February.
Meanwhile, the Royal Institution of Chartered Surveyors said there is some evidence that the housing market is picking up from historically low levels. It said buyer inquiries continued to grow strongly in July, although the pace of growth was lower than June. It also said 8 percent more of its members reported seeing house price falls instead of rises in July, compared to 18 percent in June.
It said sellers were also putting their homes on the market -- the number of new instructions increased since June -- the first rise since May 2007.
IHS Global Insight economist Howard Archer warned that the numbers did not mean the housing market had made a full recovery.
''We certainly do not think that a sharp sustained upward trend in house prices is in the process of developing,'' he said. ''Any sustained rise in house prices will mean that affordability pressures will move back up at a time when still pronounced economic weakness, sharply rising unemployment and low wage growth is negative for the housing market.''
Source
The Council of Mortgage Lenders said gross mortgage lending in the United Kingdom rose by 23 percent in June compared to the previous month but still lagged at about half of year-ago levels.
The trade association for the mortgage lending industry said there had been 45,000 house purchase loans for a total of 5.9 billion pounds ($9.7 billion) in June -- up from 36,500 loans in May.
Government statistics showed that house prices rose 2.6 percent in the quarter ending June 2009, after falling 3.8 percent in the quarter ending March 2009.
While that left average house prices 10.7 percent lower than last year, the overall rate of the fall has slowed from a 12.7 percent year-on-year fall in May, according to data released by the Communities and Local Government Department.
Council of Mortgage Lenders economist Paul Samter said low interest rates and realistic selling prices had helped house sales, but added ''there is some way to go before we reach normal levels of activity.''
There were 34,000 remortgage loans -- loans taken out against existing property -- approved in June. That was 13 percent higher than the previous month but still lower than normal. There were 96,000 remortgage loans approved in the second quarter of the year -- 21 percent lower than the previous quarter.
First time buyers appear to be re-entering the market, taking out a total of 17,200 loans with 1.9 billion pounds in June, up from 13,700 loans in May but down from 18,400 in June 2008. The typical buyer has a 25 percent deposit-- a level unchanged since February.
Meanwhile, the Royal Institution of Chartered Surveyors said there is some evidence that the housing market is picking up from historically low levels. It said buyer inquiries continued to grow strongly in July, although the pace of growth was lower than June. It also said 8 percent more of its members reported seeing house price falls instead of rises in July, compared to 18 percent in June.
It said sellers were also putting their homes on the market -- the number of new instructions increased since June -- the first rise since May 2007.
IHS Global Insight economist Howard Archer warned that the numbers did not mean the housing market had made a full recovery.
''We certainly do not think that a sharp sustained upward trend in house prices is in the process of developing,'' he said. ''Any sustained rise in house prices will mean that affordability pressures will move back up at a time when still pronounced economic weakness, sharply rising unemployment and low wage growth is negative for the housing market.''
Source
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