Mortgage market outlook

Friday, May 9, 2008

At Solution Mortgages we like to keep people informed as to what is going on in the mortgage market and how it is effecting our clients.

The market continues to fluctuate and is still struggling to cope with the events of the past 9 months. A clear indication of just how hard the financial environment really is can be seen daily in the financial press as lenders, large and small, battle to resolve their own liquidity problems.

However, the recent cash injection by the Bank of England into the UK financial system is a positive move for the industry, and conditions may be stabilizing with some large institutions making moves to sell off some of their more highly rated leveraged loans.

The market will recover, and it is likely that things will be very different as this takes place. However, many commentators including the Bank of England (BOE) now believe that we are bumping along the bottom of this crisis and hopefully we can now say that the worst is behind us.

There will undoubtedly be some further difficulty along the way, but tentative signs of recovery can now be seen.

Our completion figures for April 2008 were relatively high and our completion times from initial contact to completion stood at an average of 18 working days which in the current climate is extremely good. For those people looking for a fast remortgage you can see that we will not disappoint.

If you have any questions on this article, please feel free to contact Solution Mortgages on 0845 123 1260 or visit us at http://www.solution-mortgages.co.uk/

UK interest rates held at 5%

Thursday, May 8, 2008

The Bank of England's Monetary Policy Committee (MPC) has decided to leave interest rates unchanged at 5%.

Some in the mortgage industry would have like to see a 0.25% cut but as a company we feel it was the right move. The risks to inflation are to great to warrant a further cut and the effects of the 3 previous interest rate cuts along with the banks recent decision to offer government backed securities in exchange for mortgage backed securities are yet to be seen.

The inflationary fears seem to outweigh the reported decline in house prices and The Chartered Institute of Purchasing & Supply (CIPS) reporting the slowest growth within the services sector since 2003.

Inflation in March has allegedly remained stable at 2.5% but we find that figure skeptical on the basis that this target is set by the Government and takes very little into consideration ie the cost of housing or petrol. The Office for National Statistics says that it looks carefully at what average families pay for goods and services, many of the groups representing the elderly and the low-paid insist that the true rate of inflation is a lot higher than 2.5% or even 3.8%.

Some had thought that rates may have been reduced to stave off an economic recession which is still very possible. The news will be disappointing for homeowners who are already up against the wall and struggling to source new competitive mortgage deals.

It should also be remembered that MPC members have a duty to combat inflation rather than to prop up growth.

If you have any questions on this article or others like it, please feel free to contact Solution Mortgages on 0845 123 1260, or visit us online at www.solution-mortgages.co.uk

Bankruptcy too lenient?

Wednesday, May 7, 2008

Bankruptcy rules could be blamed for making the effects of the credit crunch even worse.

Made under the Insolvency Act 1986, bankruptcy is an order against an individual debtor (not a limited company) which signifies that he/she is unable to pay his/her debts. As a result of bankruptcy, bankrupts cannot trade or act as a company director.

Bankruptcy is often seen as an easy way for consumers who had failed to get a second chance. Have the reforms to the bankruptcy rules led to abuse?

Reforms to the Bankruptcy rules took place in 2004 which allowed bankrupts to be discharged after 1 year instead of 3. This has possibly led to a belief that money can be borrowed, regardless of whether it can actually be repaid due to the more relaxed attitude. This has led to lenders being left wide open to losses.

Bankruptcy laws should be made more stringent to stop such a lax attitude to what is a serious issue.

If you have any questions on this article or others like it, please feel free to contact Solution Mortgages on 0845 123 1260 or visit us online at www.solution-mortgages.co.uk