Banks launch mortgage support campaign

Mortgage lenders in the UK have launched an ad campaign highlighting the support available to customers if they are struggling with repayments.

Industry body UK Finance said that the key message of the campaign is to encourage people to reach out to their lender at an early stage if they are worried about making their monthly payments.

Support can include:

* Extending a mortgage term to reduce payments
* A temporary switch to interest-only payments
* A temporary reduction in payment (including zero payment if appropriate)
* A part interest-part repayment plan

The Reach Out campaign will feature ads on billboards, radio, print and digital, with plans for TV ads to roll out in September.

In the year to January 2023, lenders helped more than 200,000 borrowers who who were unable to meet their full mortgage payments and more than 2 million who needed financial difficulty assistance, UK Finance said.

Additionally, 44 mortgage lenders representing 90% of the mortgage market have signed up to the UK government’s new Mortgage Charter, committing them to additional support for borrowers. This includes giving customers approaching the end of a fixed-rate mortgage the chance to lock in a deal and request a better like-for-like deal if rates change up to six months ahead, and a guarantee of no repossession within 12 months of the first missed payment.

Hundreds of mortgage deals taken off the market

Lenders withdrew a record number of mortgage products on Wednesday in response to volatile financial markets.

In 24 hours, banks and building societies pulled 935 mortgages — around a quarter of the total — over fears the Bank of England will further increase interest rates.

Rising interest rates make borrowing more expensive and create uncertainty among lenders.

There were 2,661 mortgage deals available on Wednesday, down from 3,596 on Tuesday and 3,880 on Monday, according to data collected by financial information company Moneyfacts.

Before last week’s mini-budget, in which Chancellor Kwasi Kwarteng announced a £45bn package of tax cuts funded by government borrowing, there were 3,961 mortgage products on the market.

Rachel Springall from Moneyfacts urged mortgage borrowers to “keep calm” over the current volatility in the market and to seek advice from an independent broker.

“Various lenders have been very vocal that their decision to withdraw products is a temporary measure, amid the uncertainty over interest rates,” she added.

Mortgage brokers have reported a high number of calls from buyers hoping to lock in deals as soon as possible, according to BBC News.

Ray Boulger, at mortgage adviser John Charcol, told the BBC that rising rates would have a big impact on the ability of people to buy, and would deter some people from buying at all.

With mortgage affordability being a key factor in house prices, analysts believe that house prices could fall by up to 15% over the next 18 months.

UK lenders withdraw mortgages amid market turmoil

Banks and building societies in the UK have withdrawn several mortgage products after market volatility raised concerns of further interest rate rises.

The pound fell to a record low against the US dollar on Monday after Chancellor Kwasi Kwarteng announced a £45bn package of tax cuts in last week’s mini-budget and said he planned to cut taxes further.

A weak pound makes imports more expensive and risks fuelling price rises at a time when UK inflation is already at a 40-year high.

Traders now expect interest rates to more than double by next spring to 5.8%, from their current level of 2.25%, to help curb inflation.

Following speculation that it might intervene this week, the Bank of England said it was closely monitoring developments in the financial markets and “will not hesitate to change interest rates by as much as needed”. However, a decision is not expected until the next meeting of the Monetary Policy Committee on 3 November.

More than 350 mortgage products have been withdrawn from the market since Friday, according to financial information firm Moneyfacts.

As of Tuesday morning a total of 3,569 residential mortgage products were available, compared with 3,961 on Friday when the mini-budget was announced

Virgin Money and Skipton Building Society are among the lenders that have withdrawn mortgage products for new customers, but said submitted applications would still be processed.

UK mortgage approvals reach 13-year high

Lenders in the UK approved more than 100,000 new mortgages in November, the most since the start of the financial crisis in August 2007, according to the Bank of England.

The housing market collapsed early in the Covid-19 pandemic in April and May when lockdown restrictions were first imposed. Home buying has increased since then, driven in part by a stamp duty holiday — cutting the rate to 0% for all properties under £500,000 — which is due to expire at the end of March.

Data from the Bank of England shows that lenders approved 104,969 mortgages in November, despite England being in a national lockdown for most of the month. Approvals rose from 98,338 in October.

It comes after building society Nationwide reported last week that house prices in December were up 7.3%, their biggest annual increase in six years.

The activity in the housing market contrasts with many other parts of the UK economy which are struggling to recover.

“The good news is that the banks are increasingly eager to lend and we have started to see major institutions return to lending to buyers with small deposits, in a boost for first time buyers,” said Hina Bhudia, a partner at Knight Frank Finance, quoted by BBC News.

“The bad news is that many banks still haven’t worked through a backlog of applications that built up during the lockdown and subsequent surge in activity during 2020, and will likely struggle to cope if activity picks up during the first months of this year.”

The 4 Surprises About Mortgage Applications That Most People Don’t Know About

If you haven’t applied for a mortgage before, you probably don’t realise that the application packet can be more than 100 pages. With this many pages, it can often be hard to skim through every little word to understand what everything means. Since you’re dealing with a lot of money, it’s important that you know about any surprise that may come out to bite you and potentially kill the deal.

A Valuation Kills the Deal

When you apply for a mortgage, the lender will want to know what the home is worth. In order to get this number, they will have to order a valuation to get a fair market value. If the value comes back lower than your offer, the buyer will either have to cough up the difference or scrap the deal.

You Get to Choose the Loan

Many future applicants often think that they have to sign up for a mortgage the bank throws their way. Thankfully, this isn’t the case. When you apply for a loan, you’re going to want to choose the mortgage that fits your budget and lifestyle. Almost all lenders now have a repayment mortgage calculator which you can use to work out your repayments. Some of the most common types of mortgage include: fixed rate, tracker, discount and offset. Make sure that you explore every option to know their advantages and disadvantages.

Tougher Financial Standards

In the past, when the economy was booming, applying for a mortgage couldn’t have been easier. As the economy started to tank, many banks started applying stricter guidelines.

Today, banks are looking for a higher credit score, a larger deposit and a credible work history that can be verified. One of the biggest reasons mortgages get declined is because the buyer either has a poor credit score or can’t come up with a large enough deposit.

Generally, as long as you have a high credit score, a 20 percent deposit and you’ve been working with a job for more than two years, you should have a great chance at getting an approval letter from the bank.

Rates Can Rise

The loan rate you see on your application today doesn’t mean you’re going to be paying that for life. Some interest rates, such as a tracker mortgage, can increase with the current market conditions. While it may be tempting to be lured to the lower interest rates in the beginning, keep in mind that this rate can raise in the future, potentially costing you thousands in interest.

When you apply for a mortgage, don’t sign any paperwork until you understand what you’re getting yourself into. It’s also important that you know the important questions to ask lenders, so that you can make the right decision. If you don’t feel comfortable with the process, consider hiring a professional to help guide you along with the process.

BBA reports increase in new mortgage borrowing for May

The British Bankers’ Association (BBA), a UK association for the banking and financial services sector, released seasonally adjusted figures on Tuesday that indicate an improvement in the UK housing market.

According to the BBA, approvals for mortgages for house purchase were 24% higher in May 2013 compared to May 2012, with the average house purchase approval increasing to £159,200. Remortgaging also increased by 17% and there was a slight net rise overall in unsecured consumer borrowing.

The BBA data comes from the UK’s main high street banking groups (MBBG), which includes Barclays, HSBC Bank, Lloyds Banking Group, Royal Bank of Scotland Group, Santander UK and Virgin Money. These banking groups account for some two-thirds of all UK mortgage lending outstanding and provide around 50% of all consumer credit.

In addition to house purchases, the BBA said card borrowing appears to be on the rise, with new spending of £7.8bn on credit cards in May this year being slightly higher than the recent monthly average. This is said to be in line with an increase in retail sales volumes. The figures suggest that card borrowing is being used as an alternative method of financing, as a contraction in borrowing levels of personal loans and overdrafts has been recorded.

Business borrowing levels are still on the decline, the BBA figures showed, with net borrowing by non-financial businesses falling by £1.7bn and financial business borrowing down by £3.3bn.

David Dooks, BBA statistics director, commented: “SMEs use of their own high levels of cash resources and large companies’ use of alternative finance means demand for bank borrowing is subdued and a reflection of challenging trading conditions.”

Home repossessions in the UK continue to fall

The rate of home repossession in the UK continued to fall in the third quarter of 2012, the Council of Mortgage Lenders (CML) reported today.

In its latest quarterly report, the CML said that 8,200 properties were taken into possession by mortgage providers between July and September, down from 8,500 in the previous three-month period and from 9,600 in the third quarter last year.

The total for this year’s third quarter represents the lowest number of properties taken into possession in a single quarter since 2007. Over the first nine months of the year repossessions were down 8% compared to a year earlier.

Lenders want to keep people in their homes and repossession is a last resort, according to CML director general Paul Smee. He added that good communication and effective arrears management by borrowers, lenders and money advisers are helping the vast majority of those with mortgage repayment problems.

Mortgage arrears remained stable in the third quarter. As of the end of September, the total number of mortgages with arrears of 2.5% or more of the outstanding balance rose slightly to 159,100, up from 158,700 in the previous quarter, but remained below the 165,300 in arrears in the same period last year.

According to the CML, borrowers in the UK have 11.2 million mortgages, with loans worth over GBP1.2 trillion.

The Council of Mortgage Lenders represent banks, building societies and other lenders who together account for around 95% of all residential mortgage lending in the UK.

Separate statistics released today by the Ministry of Justice give an indication that the number of homes being repossessed will fall further over the coming months. There were 14,168 court actions for repossession issued from July to September 2012, which continues the downward trend seen since 2008.

The Ministry of Justice said that this fall in the number of claims coincides with lower interest rates and a more proactive approach from lenders in managing consumers in financial difficulties, as well as various interventions, such as the introduction of the Mortgage Pre-Action Protocol.

The Bank of England confirmed today that its Monetary Policy Committee (MPC) has decided to keep interest rates at the record low of 0.5%.

US financial services firm MetLife sells mortgage unit to JP Morgan

US insurer MetLife Inc (NYSE:MET) said it had inked an accord to sell the mortgage servicing portfolio of its banking unit MetLife Bank NA to JPMorganChase Bank NA, part of financial major JPMorgan Chase & Company (NYSE:JPM).

MetLife did not reveal the terms of the deal, which has yet to receive regulatory clearance. The portfolio under the scope of the transaction stands at some USD70bn (EUR54.6bn).

On 24 October, in a regulatory filing, the insurer said it was pondering an offload of its mortgage servicing portfolio. MetLife decided last year that a banking holding company structure was no longer appropriate, in view of its strategic focus on insurance and employee benefits, and has since sealed deals to offload certain operations of the bank and discontinued writing residential mortgages. The firm’s entire retail banking operations, including mortgages, accounted for less than 2% of its overall operating earnings in 2011.

JPMorgan’s purchase of the portfolio is in line with its plan to beef up and expand its servicing business. As a result of the acquisition, the buyer will boosts its USD1.1trn servicing operations by over 5% and it will also be able to provide solutions to a further 350,000 clients.

MetLife hired K&L Gates LLP, Milestone Advisors LLC and Deutsche Bank Securities Inc as advisors on the deal.

UK home repossession levels stable in first quarter, CML reports

Home repossessions in the UK in the first quarter of 2012 amounted to 9,600, the same as in the first quarter of 2011, the Council of Mortgage Lenders (CML) reported today.

This puts a stop to the recent trend of year-on-year increases in repossessions, although the CML noted that such stability could be disrupted by continuing pressures on household finances, changes to welfare benefits and rising mortgage rates.

Repossessions in this year’s first quarter were higher than the 8,700 registered in the fourth quarter of 2011, but this is said to reflect normal seasonal patterns.

Previously the CML has forecast that repossessions in 2012 will number around 45,000 but the organisation now believes that this figure may be revised down when its updated housing market forecasts are published later in the year.

Seeking to reassure people who are having trouble meeting their mortgage payments, Paul Smee, CML director general, said that repossession is a last resort for lenders and the number of repossessions remains relatively low. “Anyone worried about their mortgage should be assured that lenders will try to help them get back on track, as long as this is a realistic prospect,” he added.

A separate report released today by the CML on the buy-to-let sector reveals that the number of buy-to-let mortgages in arrears fell slightly in the first quarter of 2012, and the arrears rate on buy-to-let mortgages continues to be lower than in the owner-occupied sector.

Conversely, the buy-to-let repossession rate is higher than in the owner-occupier sector, where the focus is on trying to keep home-owners in their homes. The repossession rate on buy-to-let properties has remained virtually unchanged for more than a year, standing at 0.12% in the first quarter of this year, compared with 0.08% in the owner-occupied sector.

Barclays cuts fixed rate mortgages by up to 0.41 percentage points

In its eighth rate reduction in a row Barclays yesterday made cuts of up to 0.41 percentage points to 60 per cent of its Woolwich fixed rate mortgage range.

The Great Escape fixed for two years at 75 per cent loan to value (LTV) sees the largest fall from 3.79 per cent to 3.38 per cent.

Substantial cuts of up to 0.36 percentage points will also take place for the second time this month at 80 and 85 per cent LTV on two and three year fixed rates. At 80 per cent LTV the two year fixed will reduce from 3.59 per cent to 3.38 per cent for customers who qualify for a Barclays Loyalty mortgage and 3.48 per cent for all other customers. At three years it will reduce from 4.13 per cent to 3.89 per cent. The 85 per cent LTV fixed for three years will fall from 4.49 per cent to 4.13 per cent. Cuts will also take place on the five year deals at these LTVs, meaning the cheapest five year we have available is 4.39 per cent (80 per cent LTV).

Other rate reductions include a two year fixed rate at 75 per cent (LTV), cut from 2.89 per cent to 2.79 per cent for customers who qualify for a Barclays Loyalty mortgage and 2.87 per cent for all other customers

Andy Gray, head of mortgages for Barclays, said “The mortgage market continues to be fiercely competitive which has been driven by falling swap rates. This is good news for borrowers as they have the opportunity to fix at a lower rate than they may currently be paying, to save them money now and protect them against future interest rate rises. We have also for the second time this month, made substantial cuts on higher LTVs, slashing around 0.80 percentage points off three and five deals. These changes give borrowers who have a smaller deposit access to even lower rates, making home ownership even more affordable, and helping those with existing mortgages to save money.

“Remortgaging has built momentum this year across the market and our latest Great Escape package is the best deal we’ve offered at 75 per cent LTV since we launched these in the Autumn of 2010. Thousands of borrowers with mortgages at this LTV can now fix well below their SVR rate without having to pay any switching costs, making substantial savings to their monthly mortgage payments.”

All our mortgage deals allow borrowers to remortgage using our ‘Switch and Save’ service which provides free legal work and a valuation or £200 cashback. For borrowers opting for Great Escape this allows them to switch their mortgage with no application fee, free legal work, free valuation and £300 cashback to cover the cost of their existing lender’s mortgage exit fees.

For further information on Woolwich mortgages from Barclays please visit