Mortgage Lending On the Up
According to the Council of Mortgage Lenders (CML), the month of March 2010 saw an increase in mortgage lending of almost a quarter on the previous month. The total value of mortgage lending jumped to £11.5billion in March, which was also up 3% on the same time last year.
The CML was quick to point out that the total value of mortgage lending for the first quarter of 2010 was lower than the last quarter of 2009 though. This shows that the housing market’s recovery has not been a smooth growth and it will continue to fluctuate. The increase in mortgage lending and activity on the housing market late last year could have been curtailed by the end of the stamp duty break. Hopefully though, the improving economic conditions in the UK and the continuing low rates of interest rates will stimulate slow but sure improvement in the housing market.
The government has recently proposed an additional measure to help maintain activity in the market. For the next two years, the usual 1% stamp duty band will be waived for first-time buyers. So, they’ll be able to buy a home up to the value of£250,000 without the additional 1% property tax. It’s not all good news though, as first-time buyers will continue to be required to make large down payments. These can typically run at 25% of the value. Naturally, the best rates are reserved for those looking for a mortgage of less than 75% loan-to-value. Those approaching a 90% loan-to-value will be significantly more expensive. So, in order to get on the housing ladder, any potential buyers will have to raise much more initial capital for the deposit in order to achieve a favourable rate.
Ominously, the Council of Mortgage Lenders has reiterated the warning that the UK’s property market is heading for a big problem in the not too distant future. In fact, from 2011, mortgage lenders will have to find something in the region of £300billion in order to repay the government for funds borrowed through the emergency support schemes. Therefore, as a result of the special liquidity scheme and credit guarantee scheme, the moves that kept them afloat at the height of the banking crisis, mortgage lenders will continue to ration their lending.
This is a somewhat mixed message for those people who are facing debt problems that might be solved by a secured debt consolidation loan. If their ranges of unsecured debts are becoming unmanageable, debt consolidation can be a great way of bringing your finances back under control. The best rates of interest on these consolidation loans tend to be saved for those who secure the loan against an asset, which is normally their home. As such, the housing market has a huge bearing on this debt solution. For some, remortgaging can be an excellent way to settle some debt, letting you release equity from your home to pay off outstanding loans.
To find out more about how you can consolidate debt without the need for a debt consolidation loan, talk to the specialist advisors at www.harringtonbrooks.co.uk.