Monthly Archives: October 2011

Mortgage market LTVs creep slowly higher

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At the start of this year the most you could borrow was 90% LTV however there are now an increasing number of Lenders braving the 95% threshold. Among them are:

 

  • Ulster Bank offering a 5 year discounted rate (0.21% discount from SVR, current rate at 3.79% after discount) up to a max of £500,000
  • Newbury Building also offering a 5year discounted rate Offset (0.5% discount from SVR, current rate at 3.95 after discount) up to a max of £300,000
  • Skipton BS 2yr fixed rate (5.99%) mortgage up to a max of £300,000

 

And there are many other examples of 95% mortgages where a deposit and/or a charge on a separate property is offered by a family member (e.g. Lloyds Bank’s so called “Lend A Hand” mortgage range or Market Harborough’s “Family Deposit” scheme) so while we’re not strictly counting these, it’s good to see the option exists.

 

Now, all these mortgages are for first time buyers (sorry no best remortgage deals here), are of limited availability and do required that you have an immaculate credit record; so it’s not quite “the good old days” of credit but it’s a step in the right direction. For balance too though we must point out that not everyone is heading in this direction: only last week NatWest (yes, that’s the bank that we, the taxpayer, own 83% of though our holding in the Royal Bank of Scotland Group) withdrew its 90% mortgages!

 

There’s some good news in the resurgent Buy to Let UK market too. Not only is this sector hotting up with rental yields rising but Lenders are taking more interest too. Barclays recently said they wanted to quadruple their amount of Buy to Let business in the UK next year and the long-held 75% max LTV threshold for Buy to Lets has also recently been breached. TBMC (The Mortgage Business Company) have launched an 85% LTV Buy to Let mortgage fixed at 5.99% for 2 years with a £130 booking fee and 1% arrangement charge (APR 6.99%) – cheap it may not be but with some of the yields being seen on HMOs at the moment, it will make sense to many.

 

So the signs are a little more encouraging than before and if this blog hasn’t jinxed it, we’re hoping the general trend will continue into 2012.

Buy to Let mortgages in the UK not to be regulated

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While we are still some way away from a definitive resolution, according to the Council of Mortgage Lenders (CML) exemptions being added to the European Commission’s Mortgage Directive now seem to indicate that Buy to Let mortgages in the UK will not be regulated. Though these exemptions have yet to be published publicly, this news will come as a huge relief to many in the industry.

 

Last week the European Parliament’s Internal Markets and Consumer Protection committee (IMPC), one of two committees developing the directive, published its report on the EC’s proposals.In a subsequent Newsletter from the CML they agreed that a uniform approach to all lending and consumers was not appropriate and confirmed exemptions would be made. In their statement they said “The UK believes it is inappropriate to regulate buy-to-let under rules designed to protect consumers and we understand that amendments have now been laid that would exempt this type of lending from regulation under the directive.”

 

In addition some of the obligations on Lenders would also be lifted such as:

- the requirement to state why an application was rejected

- the requirement for advice to be based on a sufficiently wide range of products should be amended so that consumers must be told if advice is only being given on a limited range

 

In general this news will be welcomed by the industry but until the Directive is finalised there will still be a collective holding of breaths. It’s good to see though that he EC has recognised the different characteristics of the Buy to Let industry in the UK and elsewhere and the different calibre of consumer to the general mortgage market.

 

However, the Directive is not yet finalised and is due to be debated and voted on by the European parliament in the coming months.

Leeds BS offers 1.99% Fixed rate 2 year deal

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Leeds BS has launched a new 2 year fixed rate deal at 1.99%, making it one of the lowest fixed rate deals in the market. The details are:

  • Rate fixed at 1.99 until december 2013
  • Max LTV of 70%
  • Fees of £1,999 for mortgages up to £500,000 and for mortgages over that amount it’s a flat 1%
  • Loan repayments of up to 10% are allowed in any year
  • Early Repayment charges are 3% in Year 1 and 2% in Year 2
  • Availability is limited
We felt this deal was worth pointing out as it is actually the lowest fixed rate that Leeds BS have ever offered in their 136 year history and is a sign of how the market is increasingly competitive.
If you are looking for a mortgage be it a First time purchase, a Buy to Let in the UK or just want the Best remortgage deals then do get in touch with us at Choice Loans and we’ll connect you with one of our panel of expert Mortgage Advisers.

AOBP Annual General Meeting 2011

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On Thursday last, October 6th, we attended the Association of Bridging Professionals’ (AOBP) Annual Conference in Millbank Tower, London. This was the first such meeting of this fledgling organisation which is a mere 1 year old! In that time – they tell us – they have racked up some 350+ members, attracted some key sponsors and have begun to lobby on behalf of and represent the Bridging finance industry. If that’s what they’ve managed form a standing start in 1 year, we can’t wait to see what the next year will bring!

 

Credit where it’s due, this was a well-organised meeting and reflected well on what is increasingly gaining a reputation as a well-organised professional body. The great and the good of the Bridging finance community gathered and numbered to our eyes some 200 or so which is an amazing turnout for a meeting in the middle of the working day, in the middle of a very busy market. Chaired by the eloquent Jonathan Newman we heard about how the organisation was founded, got an update on the rapid growth of the AOBP and had presentations on topics of relevance to our industry. Matters such as impending regulation of the Bridging Loan Industry and

 

It was good too to see how the AOBP is working with other industry groups. Representing the NACFB (National Association of Commercial Finance Brokers) was John Philips and it was only right that he was afforded the opportunity at this meeting to speak of his own group. Clearly there are large overlaps here and the industry is best served by all professional bodies working together which seems to be the case. We also had a brief update from the other major Bridging Finance Industry representative body, the Association of Short term Lenders (ASTL), who pointed out that their role has traditionally been more out of the public eye but doing the “hard yards” of lobbying politicians and Decision makers regarding the direction of future regulation and policy decisions. I couldn’t help but think the tone of the speech was a touch defensive and perhaps reactionary in the face of the widespread publicity and support the AOBP has received in such a short space of time but there is not doubt that ASTL has done some excellent work and combined with AOPB will contuniue to lobby on behalf of the industry.

 

Overall the format worked well and the Speakers were concise and relevant, though a slight overrun did mean much of the audience had to leave before the last few speakers. Despite this there was ample time before and after the speakers to network and swap business cards and some good contacts were made. Oh, and we have to mention the excellent facilities and food there as well – the AOPB sure do know how to host an event!

 

The impression we were left with was that the Bridging finance industry is showing great unity at a time when it is needed amid a background of substantial growth and now has another strong voice to lobby for more appropriate treatment of the sector by the regulators. Given the changes and challenges that are ahead, the timing couldn’t be better.