View more on these topics

Get together to help owners and FTBs

There is a growing fear in the industry that the Bank of England will raise the base rate again this Thursday, as it emerged that year-on-year mortgage approvals edged up only slightly in April.

Financial markets are betting that rates could rise as high as 6% this year as the BoE battles inflation. Such a rise could pile up trouble for debt-laden Brits. This worry is compounded by the fact the number of County Court judgments served for non-payment of consumer debt neared a 10-year high in Q1 2007.

In that period, 247,187 consumer debt-related CCJs were issued – up 9.5% on the total recorded in the same period last year. This represents the highest quarterly total since the summer of 1997, when the number of judgments hit 247,991, according to Registry Trust statistics.

This comes as it was revealed that the average price of a house in England and Wales edged closer to the 180,000 mark in April following a hike of 0.6% in the month, according to the Land Registry. The average house price in England and Wales now stands at 179,935 – more than 15,000 higher than the same period a year earlier.

The situation isn’t being made any easier by lenders continuing to increase their SVRs and pull their most competitive fixed rates. Swap rates have broken through the 6% barrier which means the money markets have factored in at least another 0.25% rise – possibly two.

And it seems borrowers are starting to realise it’s not always advisable to go for the highest income multiple available. Yorkshire Bank says 24% of borrowers are looking to avoid taking out maximum mortgages.

With minimal reserves to fall back on, even desperate first-time buyers are beginning to show more caution. Almost one-third intend to avoid stretching their finances from the outset for fear a further rate rise might tip them over the edge of affordability. Over three-quarters of those surveyed anticipate further rate rises over the next 12 months.

And despite seven out of 10 people expecting house prices to continue rising over the next 12 months, just one in six would be prepared to offer the full asking price immediately.

Since last September, fixed rate mortgages have grown to make up more than 60% of the market – up from 48% before the Monetary Policy Committee began its recent spate of rate hikes.

You can’t help but feel sorry for house buyers and sellers. One minute they need Home Information Packs, the next they don’t. They try to find a good fixed rate and they can’t.

When is the industry and the government finally going to take a coordinated approach to helping home owners and those struggling to get on the ladder?


Satellite packager could go it alone

Lighthouse Group has launched a satellite packager in partnership with The Mortgages Times Group that it says has the potential to become a rival packager in its own right. The new packager, Lighthouse Packing, will offer inhouse packaging services for specialist and sub-prime applications. Lighthouse Group, an independent financial adviser group, says growth in its […] to offer free sub-prime advice is offering free advice to borrowers with poor credit histories in a bid to grow its presence in the sub-prime market. John Charcol’s online brokerage says sub-prime is a growing market and has estimated that annual lending in the sector is worth about £30bn or 8% of the market. It also says that repossessions […]

Never say never to secured loans

In a recent news story, when a broker was asked whether a new sourcing system for secured loans would be of value to him, he was adamant there were no circumstances under which he would recommend secured loans.

GHL quits PMPA to join RAMP

GHL Group has left the Professional Mortgage Packager Alliance to join the Regulatory Association of Mortgage Packagers. But it denies that its move is a result of the resignation of Jon O’Brien, former operations director at PMPA. KGB Packaging also recently left PMPA for RAMP, but also denies this is linked to O’Brien’s departure.

Time for a new approach to asset allocation

Trevor Greetham, RLAM’s head of multi asset, introduces the recentlylaunched RL GMAPs. Asset allocation has become an increasingly difficult challenge for investors and advisers in the years since the financial crisis. Sometimes violent price swings in stock and commodity markets coupled with the collapse in the rate of interest on bonds have made it harder […]


News and expert analysis straight to your inbox

Sign up