Competitive Mortgages to Remain Difficult to Find

The Council of Mortgage Lenders has warned that borrowers will continue to find it difficult to access competitive mortgages for 'years to come' unless reforms are brought in to change the way lenders raise money.

The CML warns that when current government support schemes cease in 2014, there will be a £300bn gap between demand for new mortgages and finds available from lenders. This will lead to a fall, in the longer-term, in the choice of mortgages available.

The CML is requesting government support to re-establish a sustainable securitisation market, so that new wholesale funding can be raised.

House Prices Rise in January

House prices rose by 1.2% in January according to figures from Nationwide. This increases the annual rate of increase to 8.6%.

The Nationwide has suggested that annual house price inflation could soon hit 10% as prices have been rising now for 9 months in a row and the current rate of increase is the highest since October 2007.

Again the lack of supply of available property appears to continue to be the main driver in rising prices.

Mortgage Arrears and House Repossessions - New Rules Proposed

The Financial Service Authority has proposed new rules to make the repossession of houses the last resort employed by banks when dealing with mortgage arrears. The FSA wants to ensure borrowers are treated 'more fairly' by banks and to ensure that those who fall behind in their mortgage payments are not landed with an unfair level of charges.

In September 2009, there were 164,000 mortgages in arrears by 2.5% of more of their outstanding balance.

The FSA is also looking to tighten rules on mortgage brokers and their staff and also wants to ban self-certified mortgages, with all borrowers needing to prove that their could afford the mortgages they are applying for.

Property Sales at 2 Year High

HMRC has released figures today showing that completed sales hit a 2 year high in December. Over 104,000 deals were completed in December 2009, the first time the figure has been above 100,000 since December 2007, adding to evidence of a recovery in the housing market.

Sales reached their lowest point in January 2009, with only 41,000 properties sold the lowest level since 1977 when records began.

Overall in 2009, the number of transactions was broadly similar to 2008, with a total of 848,000 properties sold. Contrast this figure though with the boom years - in 2006, 1.67 million homes were sold and 1.62 million in 2007.