Some borrowers can still get good deals on mortgages

Industry professionals have stated that despite the chaos that seems to have hit the mortgage markets, and the reports of doom and gloom when it comes to getting a mortgage, there are still some affordable deals on offer to many consumers.

Officials from mform described the panic in relation to the mortgage market as ‘overdone’, and added that the difference in interest rates for those with a 90% loan to value ratio compared to those with a 50% loan to value ratio was nominal.

One official from the group stated: ‘Mortgage customers are undoubtedly facing challenging times but they are not as bleak as is being painted. People coming off two, three and five-year fixed rate deals this year will face higher monthly payments. ‘However they will have benefited from house price increases and that will have enabled them to build equity and to substantially improve their loan-to-value.’

However, this opinion is not mirrored by many other industry officials. Officials from Protiviti, the risk management group, have stated that things are already very bleak for mortgage customers and mortgage lenders, and the situation is expected to continue getting worse.

A massive 85% of mortgage brokers have expressed opinions that mortgage customers will face severe difficulties in securing finance as a result of the effects of the global credit crunch, which has seen far tighter credit conditions come into play.

One official from Protiviti stated: ‘Banks and building societies are not surprisingly reviewing their lending criteria and overhauling their risk management programmes in the light of the current market and economic situation with the aim of reducing their exposure to bad debt.’

PM meets with UK bank chiefs

The Prime Minister, Gordon Brown, met with bank chiefs on Tuesday morning in order to discuss a number of factors relating to the credit crunch, including the housing and mortgage sectors, and their effect on the economy.

The meeting held at Downing Street included chiefs from HSBC, Barclays, Lloyds TSB, Royal Bank of Scotland, and Nationwide. Officials from 10 Downing Street said that the meeting was nothing to do with crisis talks, but was a meeting that had been planned for some time.

Following the meeting the Prime Minister said that he would not be put off from making the right long term decisions for the UK even if they proved unpopular in the short term.

Amongst the things that were discussed at the meeting were how confidence could be restored in the housing and mortgage markets and the importance of lenders passing on the full base rate cuts to borrowers.

Mr Brown said: “I will not hesitate to take these long-term decisions. That’s what being in politics is about. Of course sometimes it is unpopular in the short term. Sometimes you might get no temporary advantage out of what might be the right long term thing to do.”

He added: “We’re taking all the measures that we can and we will not be diverted from this as a fundamental priority.” He also said: “we’ve got to show people who are worried about their homes and people who are worried about their mortgages and people who are worried about their jobs that we can ensure that the economy is safe for them over the next few months.”

David Cameron from the Conservative Party has said that Labour have wasted a great deal of money, stating: “What people are really interested in is what would you do for the future and what I’m saying very clearly is that spending needs to be properly controlled.”

Queen’s party cancelled over recession fears

With consumers struggling to pay their mortgages, many facing repossession, rising living costs and bills, and the country on the verge of recession the nation could be forgiven for thinking that the lavish celebrations that the Royal family had in mind for the Queen’s diamond wedding anniversary would be insensitive and unnecessary, stinging like a slap in the face for those who face losing their homes and cannot afford to make ends meet each month.

A recent report has indicated that the Queen and her household have recognised this, and as a result of predicted public feeling over the celebrations has decided to cancel the party arranged to mark the special occasion.

As would be expected, the event was set to be a very expensive and lavish one, but with the country facing recession and the public facing severe financial difficulties the Queen has decided that the party should be cancelled.

The report states that the party was to be funded by friends of the Queen and Prince Philip, and they said that they were disappointed that the event had been called off but understood the Queen’s reasoning.

One source close to the Royals said: ‘It is a great shame, but the Queen does not want to be seen to be doing something so elaborate at a time of such economic gloom. The Queen decided to cancel the party because of the very real prospect that the country is about to go through a major recession.’

The source added: ‘The Queen does not want to be seen to be accused of being extravagant when everyone else is worrying about their finances. There has been a lot of talk since December that everyone in Britain is tightening their belts. With that in mind, the Queen felt that it would be entirely inappropriate to throw a party on a day that wasn’t even her actual wedding anniversary.’

House prices fall for sixth consecutive month

According to a recent report house prices in the UK have fallen for the sixth consecutive month, which has resulted in house price growth stalling in the month of March.

Over the past year the average house price in England and Wales has increased by only0.4% which puts the average house price at just £174,100 according to figures from Hometrack.

The data goes on to show that nearly 30% of postcode areas in England and Wales saw a reduction in house prices over the course of March, with house prices falling by 0.2% over the course of the month.

A recent report shows that most house price indexes are showing reductions in house prices, with the global credit crunch and lack of affordability affecting the housing market.

Many lenders have had to raise their interest rates on mortgages, and many others have tightened their lending criteria to the point where many consumers are unable to get finance to purchase a property.

According to industry officials the number of prospective buyers registering with estate agents as well as the number of homeowners putting their properties up for sale slid in March compared to February.

There was an 8% increase in the number of sales agreed in March, but this was compared to a 20% rise in the number of sales agreed in February.

One Hometrack official said: ‘Some bounce-back in market activity was inevitable after what has been a prolonged period of weak market activity. However the growth in demand over the last two months is only a third of the level seen in previous years so the spring market is likely to be a non event this year. Continued uncertainty in the financial markets, affordability pressures and weak buyer confidence are all likely to suppress levels of market activity in the months ahead with pricing levels remaining under pressure.’