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
Wednesday, October 28, 2009
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
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