The government should consider imposing caps on the amount mortgage companies can lend to homebuyers, the deputy governor of the Bank of England has suggested. Sir John Gieve, who is stepping down at the end of the month, said that in theory, a ceiling on loan-to-income and loan-to-value ratios could have provided an effective brake
The level or arrears and repossession should be lower than the early 1990s, the head of the Financial Services Authority (FSA) said yesterday, as the short-term financial position of many borrowers had been improved by low interest rates. Lord Turner added he is still considering regulating the size of mortgages being made available â limiting
Meanwhile, consumers are saving less and paying off debts faster, according to research from Nationwide. Less than half of consumers save money regularly, with 25 per cent saving nothing at all, a figure getting worse since the Bank of England dropped its base rate from 2 to 0.5 per cent in December. More than half
The (RLA) is warning buy-to-let investors that lenders may try to change their borrowing rates as property values fall. The RLA says some mortgage agreements allow lenders to alter their rates if the loan to value (LTV) changes significantly. Alan Ward of the RLA said lenders may look for large repayments of capital as well
Meanwhile Abbey National, the country’s second-largest mortgage lender, has announced that it will relax lending criteria on its most popular loans tomorrow. It is lowering the minimum deposit required for its best fixed rate deal from 40 to 30 per cent. The move comes as the Bank of England said that recovery in the economy
Consumers could face having their mortgage and bank accounts branded with a health warning system, similar to the traffic lights system for food, in the government’s expected response to the financial crisis to be laid out today. Under the proposals the riskiest products, such as mortgages with ‘teaser rates’ which rise sharply once signed up,
Millions of homeowners with mortgages set to expire in the coming year will be forced on to standard variable rates, increasing the risk of a jump in repossessions, analysts warn. The shortage of mortgage funding has meant that many borrowers are being rejected for new deals, and economists are predicting the cost of borrowing will
Some building societies are charging mortgage customers twice as much interest as banks, adding more than £1,000 to the cost of monthly repayments. Building societies say mortgage rates are not being lowered to maintain savers’ levels of return, but research casts doubt on some societies’ claims.
The UK’s biggest building society, the Nationwide no longer promises new borrowers that it will peg its variable rate mortgages to the Bank of England base rate. Existing customers on the variable rate home loan are guaranteed to pay no more than 2 per cent above the bank’s rate, but new customers will move to
Nearly one in three households, or eight million people, are seeing their cost of living fall as mortgage bills drop following the cut in base interest rates. This is an increase from just 2 per cent in September last year. Research by the Institute of Fiscal Studies has found however, that there are stark differences