Mortgage ‘prisoners’ need protection

I’m really trying to move on from the number of lenders shying away from interest only as a style of mortgage repayment offering, yet more and more keep joining the band wagon! Coventry Building Society followed Nationwide last week in restricting interest only lending to 50% loan to value. This week, Skipton Building Society has limited their interest only offering to 60% of the property value. However, they have been more positive than some, in that they will allow 60% on interest only and a further 20% on repayment, taking the total to 80% of the property value. Well done Skipton! This is a much better option than with those lenders who insist that anything over 50% must be all on a ‘repayment’ only basis. Customers must be allowed to take some responsibility for their own decisions in these matters.

Last week’s budget was something of an anti-climax. As we all sat waiting for the big fix to aid an increase in mortgage lending and a boost to property sales, only the NewBuy scheme really got a mention. We saw an increase to 7% stamp duty land tax (SDLT) implemented on properties of £2m and an eye watering 15% SDLT for those buying a property over £2m in a company
name. But that was it! Nothing obvious to help get the ball rolling for property sales in the middle sector. I’m also still unsure why the Government are concentrating on New Build
properties for First Time Buyers when there are, allegedly, over one million properties currently sitting empty in the UK and over two million people are sitting as mortgage ‘prisoners’ due to recent changes in lenders mortgage criteria making it nigh on impossible for them to change mortgages. I therefore beg to question where the responsibility may lay for this torrid state of affairs! As we’ve seen recently, lenders are hiking their Standard Variable Rates to existing customers and someone needs to protect those with nowhere else to go, otherwise there are more huge issues yet to come. Watch this space……..

Finally, house prices rose by 0.6% in February after falling for the previous two months, with the average UK house price now at £162,712, according to the Nationwide House Price index.