Past Articles for the Houses and Mortgages Category

The Citizen’s Advice service has welcomed measures announced by the government that could help people avoid repossession.

Chief executive David Harker claimed that the reforms may be an effective way of keeping families in their homes, when unexpected events such as job losses occur.

“Helping people stay in their homes will reduce the risk of social exclusion that arises when families have to enter temporary accommodation”, he commented.

He added that the increased capital limit for the income support for mortgage interest system was particularly important.

However, he warned that for the new introductions to work, lenders must show “forbearance” and treat those in difficulty fairly by negotiating affordable payment arrangements.

Court action must only be “taken where all other options have failed” he concluded.

Meanwhile, in a bid to aid first time buyers, the chancellor revealed that stamp duty will be waived for home purchases under £175,000 for the coming year.

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Homeowners struggling to repay their mortgages should be given more support according to a property organisation.

The Association of Mortgage Intermediaries (AMI) has called on ministers to intervene in the failing housing market.

Director general Chris Cummings said that repossession should only ever be used as a last resort.

He suggested aid should be given to those having difficulties through the benefits system, which would help them to clear debt.

“The government must help homeowners who now find themselves with less support than in the 1990s” he added.

A reform of the stamp duty and income support for mortgage interest systems is being called for by the AMI.

Mr Cummings stated that ministers should look at international methods to see how they function.

Homeless charity Shelter recently warned that many tenants are facing repossession due to the amount of arrears in the buy-to-let mortgages sector.

By Jamie Price

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Mortgage approvals have fallen 71 per cent in a year, according to new statistics from the Bank of England.

The number of new homeowner loans declined to a record low of 33,000 in July, compared with 114,000 in the same period last year.

Remortgages also suffered a drop, falling from 80,000 in June to 69,000 in the following month.

However, net mortgage lending, which takes out repayments and redemptions, increased to around £3.2 billion in July, an increase from the previous month.

Commenting on the figures, shadow chief secretary to the Treasury Philip Hammond said: “The government should make an early announcement to avoid further damage to the market.”

A recent study by the Royal Institute of Chartered Surveyors blamed the inability to secure a mortgage as a major factor in failed house sales. The average number of transactions per surveyor fell to 14.4 in July, the lowest figure in the study’s history.

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While insurance is often advised to protect against debt management problems arising from damage to homes, property owners may also want to consider how they may pay for home improvements.

According to research from Halifax, 80 per cent of people who took on home improvements the past year financed them with savings, which indicates many people are planning for renovations in advance.

Speaking about these figures, head of saving at the bank Tony Wilcox said they were “encouraging”.

“Using savings for such improvements means savers are really seeing the benefits of putting money aside,” he said.

He added that the study goes against “the buy now pay later culture” that many think is widespread in the UK.

However, the research also shows ten per cent of home-improvers risked credit card debt by paying for potentially expensive work with plastic. Some five per cent took out a personal loan for pay for work on their property.

This week, Fair Investment warned people to be careful to protect their credit card details from fraudsters.

By Morwenna Kearns

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Those approaching retirement age may be concerned about their income once they finish work and whether they will be able to live debt free.

According to Fair Investment, pensions are “pathetic” and do not provide enough money for older people.

It suggests equity release schemes as a potential way to top up pensions for property owners.

Of the two types of equity release scheme, the most popular is the lifetime mortgage, which is a loan secured against a home. The lender is repaid once the house is sold, whether it is after death or if the owner decides to move out, so it remains in the owner’s possession for as long as he or she likes.

The other option is home reversion plan, which involves selling the property to a reversion company or an individual but staying on as a tenant throughout retirement.

Chartered financial planner at Fair Investment, Sharon Bratley, said decisions should not be taken “lightly”.

“Remember, this is your home you are dealing with and you should seek extensive advice before taking out any kind of loan on your home,” she said.

For those worried about arrears and other debt management problems, debt advice is available from ClearDebt.

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New research from Abbey Mortgages has found 12 per cent of mortgage holders are planning to overpay in the next six months.

A total of three per cent are intending to take advantage of a payment holiday and one per cent expect to underpay, suggesting more consumers are preparing for a financial storm before it hits.

The statistics also suggest that the increased cost of living – including household bill rises – are not affecting people’s wish to become debt free.

In addition, one mortgagee in ten is planning to change their lender in the next six months, which may indicate people are keen to save money and stay clear of unnecessary arrears and other debt management problems.

Phil Cliff, director of Abbey Mortgages, said people seem to be utilising the flexibility of mortgage deals.

“It’s great to see that people are quite rightly prioritising their mortgage payments ahead of other financial commitments,” he added.

Also in the news today, Shelter has called on mortgage lenders to consider the effects on tenants when buy-to-let properties are repossessed.

By Morwenna Kearns

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Borrowers are finding the rising costs of mortgages and unsecured personal loans too expensive, causing a decline in the number of deals agreed, uSwitch has said.

The comparison site found unsecured and mortgage lending has declined by nearly £11 billion from the second quarter of last year to the second quarter of this.

In this period, 157,000 fewer unsecured personal loans were agreed, a decrease of £1.1 billion.

However, this has been partially counteracted by credit cards. Plastic spending increased by an average of £179 million each quarter. In total, this equates to an increase of £717 million when the second quarters of 2007 and 2008 are compared.

Head of personal finance expert at the website Simeon Linstead said: “Whilst it’s good news that people can still access extra money if they need it, this is not a sustainable solution for the problem.”

He added that it has caused “a huge knock-on effect” on the UK housing market.

Additionally, the rise in plastic use could result in increased credit card debt. For those who wish to clear debt, a consolidation loan may be one option to consider.

By Morwenna Kearns

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People who rent their homes may be hit by repossession due to their landlords’ debt management problems.

According to new research from the Council of Mortgage Lenders, buy-to-let repossessions are increasing twice as quickly as total mortgage repossessions.

Shelter, citing the figures, has urged lenders to consider tenants when taking repossession action.

“Mortgage lenders must take responsibility and make sure they inform both owners and tenants when taking action to repossess, so tenants are aware they are about to lose their home,” said the charity’s chief executive Adam Sampson.

Mr Sampson also called on the government to help people who have lost their homes due to landlords failing to meet repayment demands.

Across the mortgage market as a whole, repossessions increased by 48 per cent between the first half of 2007 and the first half of this year. In terms of buy-to-let mortgages, repossessions increased by 100 per cent.

Homelessness and housing charity Shelter was founded in England in 1966.

By Morwenna Kearns

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Homes in Britain are currently priced 35 per cent higher than most people can afford, a property expert has said.

Paul Holmes, chief executive of Firstrung, said “market forces have run amok”.

“I think we all have to look at when house prices peaked this time last year and take 35 per cent off that price,” he said.

Mr Holmes added that this correction would take prices back to levels seen in 2003 to 2004, “when first-time buyers were still struggling”.

The difficult housing market may see people building up debt management issues due to arrears from high mortgages. People in this position should consider seeking debt advice.

According to the Royal Institution of Chartered Surveyors, to purchase a typical home, buyers need to find £27,738 for upfront costs. For a first-time buyer couple who earn lower quartile earnings (totalling £27,516 after taxes), this means saving more than 100 per cent of their combined take-home pay.

By Morwenna Kearns

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GE Money has recommended consumers get professional advice following the release of statistics revealing more people are being accepted for loans and mortgages.

Over 3.4 million people have been rejected for secured and unsecured loans, mortgages and remortgages in the 18 months up to July this year, the study found.

Furthermore, 450,000 customers were turned down four or more times before having their application accepted.

This may indicate that people are risking debt management problems by agreeing to loan and mortgage rates above a rate they can afford, just so they can be accepted.

“The key to successfully navigating through the current storm is to ensure you do you homework, check you credit file looks as good as it can,” GE Money’s head of mortgage marketing Gerry Bell said.

He added that a broker may also help before making an application.

This week Moneysupermarket.com said homeowners should look at both mortgage rates and fees to ensure they get the best deal.

By Morwenna Kearns

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