Mortgage went up a little in October, according to the Council of Mortgage Lenders.

Total mortgage lending rose to £18.7bn, 7% up from September.

However, Octobers lending was still 44% lower than in October 2007.

The CML said mortgage lending would slow in the next few months, despite cuts in interest rates in October and November .

“Consumer confidence is now being affected by the worsening economic outlook,” said the CML’s director general Michael Coogan.

“However, any recovery in lending is also being held back by the continuing shortage of mortgage funding.”

The gross mortgage lending figures are unstable and have twice shown monthly increases this year.

Despite this al this 2008 is set to go down as the year which saw the biggest slump in home sales and prices on record.

Some experts beleive that the drop in mortgage lending may now have reached the bottom.

This week the Royal Institution of Chartered Surveyors pointed out that its own surveys had shown there had been a recent increase in enquiries from potential new buyers, an accurate indicator of future trends in home sales.

But even if mortgage lending and home sales stabilise at current levels, other experts are forecasting that prices will continue to fall, with some suggesting that they could go down by a further 15-20% in 2009 after a likely drop of around 15% this year.

“Few people will take heart from the fact the latest lending figures are marginally up on September, as they are still massively lower than October last year,” said Andrew Montlake, of mortgage brokers Cobalt Capital.

“You have a double whammy where consumer confidence is shot to bits by a rapidly weakening economy and the mainstream lenders are only accepting “quality” applicants with big deposits.

“I hate to say it but it could be some time before things start to improve,” he added.

Some of Britain’s biggest  mortgage lenders are continuing to charge higher interest rates for new customers and neglecting to pass on the falls in market lending rates, which have been easing a little over the past several weeks.

We are all aware the Bank of England slashed its main interest rate to 3 per cent last week, the lowest it’s been in more than 50 years and that further interst cuts are expected shortly, possibly as soon as December. New information received this week shows that inflation is falling faster than expected.

The Office for National Statistics yesterday stated inflation, fell to an annual rate of 4.5 % in October, down from 5.2 % in September. Economists had been expecting a smaller drop but a combination of falling petrol prices and a slowdown in the growth in food prices helped to bring the rate down faster than first thought.

Homeowners with tracker rate mortgages are set to see massive drops in their monthly payments after this month’s 1.5 % cut in the Bank of England interest rates, new customers looking for new tracker mortgage deals are likely to be paying a bigger margin above the Bank rate than they would have done just a fortnight ago. Libor, the rate at which banks lend to each other,has fallen, from about 5.7 per cent at the end of last month, to a little over 4 %.

However, as the gap closes between Libor and the Bank rate, lenders are still increasing the margin on new mortgages. Halifax released a new range of trackers mortgages the other day, which charge between 1.99% and 2.39 % above the Bank rate. Last week, Lloyds, Abbey and Alliance & Leicester also released new trackers – all priced at least 1.79 % above the Bank rate.

“The margins are very wide – much wider than they were a month ago,” said David Hollingworth, of London & Country Mortgages, the independent broker. “But for many consumers, a bigger problem will be that most of the products available at the moment are only for those with a low loan to value [LTV].”

Almost the whole range of new tracker rate mortgages available are only open to borrowers with more than 25 % deposit available or current equity in their property. For homeowners who have a mortgage worth 80 % LTV or higher of their property’s current value, it is almost impossible to get a tracker mortgage. And for those with a 90 per cent LTV, there are only a few products on offer – mostly at much higher interest rates more than double the Bank rate.

Mr Hollingworth said a rising number of borrowers may be forced to revert to their bank’s standard variable rate (SVR). This may not be as unappealing as it once was, as many banks have slashed their SVRs by 1.5 percentage points since the start of the month, after the Chancellor put pressure on them to pass on the full Bank rate cut.

Sue Anderson, of the Council of Mortgage Lenders, defended the banks’ decision to increase the margin on their trackers. “It reflects the mix of business levels that lenders now have,” she said. “A lot of lenders fully cut their SVRs by 1.5 percentage points, even though their own funding cost would not have been cut by that amount.”

Lower transport costs led to a record fall in inflation from 5.2% in September to 4.5% in October.

The 0.7% fall in the CPI is the largest  drop
since January 1997 when records began and the largest
since April 1992.Transport inflation fell to 4.3% in October, from 7.6% in September.

This  deceleration is the largest slow-down since CPI records began. It was triggered by a dramatic fall in the price of crude oil.

The average price of petrol fell by 7.1p per litre between September and October this year, to stand at 104.5p, compared with a rise of 2.7p last year.

Diesel prices fell by 7p per litre this year, to stand at 116.3p. There was also a fall in the price of both air and sea  transport.

The effect from air fares came mainly from the cost of European flights.

There was another large downward contribution from food and non-alcoholic
drinks.

Buy to let landlords could be set to buy up an increasing number of properties over the next 12 months, according to new figures released.

The Mortgage Works, a subsidiary of Nationwide Building Society recently released figues which found that almost 50 per cent of “professional investors” expect to purchase two or more properties over the next year.

The Sunday Herald stated that 65 per cent of brokers are predicting that demand for rental properties will rise over the next six months.

Brian Adair, executive chairman of Ryden Lettings, told the newspaper the interest from renters is “particularly acute” towards the lower end of the market.

“There is strong tenant demand for properties between £400 and £700 a month, mainly from would-be first-time buyers who cannot get a mortgage,” he added.

Home owners wishing to sell their houses  quickly have started to lower their prices substantially to attract what few buyers remain in the housing market, a survey shows today.

Rightmove’s monthly housing market survey showed sellers have reduced their asking prices by 2.9% this month from October - the biggest fall since December last year and the largest ever for a November.

The survey also found that asking prices were down 7.1% on prices a year ago, but Rightmove said agents were reporting that deals were being struck nearer to 20% down from the peak in autumn last year. The average home coming onto the market cost £223,000 in the four weeks to November 8.

“Some sellers could avoid months of disillusionment and despair if they started marketing at an asking price closer to where the evidence indicates they are likely to end up,” said Miles Shipside, the commercial director of Rightmove.

“While average asking prices have fallen by 7.1% over the past year, in most parts of the country you should look to at least double that discount to achieve a sale.”

20,000 people a week put their property up for sale during the period, the lowest level recorded by Rightmove since 2002 and down on a level of about 35,000 a week 12 months ago.

The survey comes after the Halifax reported last week that prices in the October were down 15% from a year ago.

The amount  of different mortgages available fell by around  10% as lenders continued to pull rates following last week’s interest rate cut.

There are now only 2,345 mortgages available across the whole market, compared with 2,602 last Friday,down on the 15,599 that were around in July 2007 before the credit crunch first struck.

First-time buyers have been hit hard, with only 32 different loans available for people with a 5% deposit, compared with 38 on Friday and more than one thousand in July 2007.

But 25% of these mortgages are only available to people living in Northern Ireland, while many have such tight credit scoring conditions that it would be difficult for many first-time buyers to qualify for them.

If first-time buyers do manage to qualify for a 95% mortgage they will pay large premium in terms of the rate. The best fixed rate deal available for a loan to value ratio of 95% is currently 6.75%, compared with a leading rate of 4.89% for people borrowing only 60% of the value of their home.

The amount of mortgages for people borrowing 90% of their home’s value is also continuing to shrink, falling to 171, down from 212 at the end of last week.

Mortgage lenders withdraw their tracker rate  mortgages last week in the wake of the Bank of England’s astonishing 1.5% interest rate cut, with 33 lenders pulling their entire tracker range.

The majority of lenders are expected to relaunch products this week.The key inter-bank lending rate three-month Libor, upon which variable rate mortgages are based, fell by a further 0.075% to 4.42%, after a 1% drop on Friday last week. But the rate still remains nearly 1.5% higher than the base rate of 3%, well up on its pre-credit crunch range of between 0.15% and 0.2%.

UK mortgage lenders have started to announce new mortgage deals after the Bank of England’s surprise rate cut to 3%.

Three mortage lenders will be lauching tracker deals for new borrowers, but are widening the margin between the rate they charge and the Bank’s rate.

Most tracker mortgages are linked to the Bank rate and that rate is  expected to fall more in the  coming months.

Latest figures show that many new mortgages have been tracker deals, rather than fixed-rate.

Almost all tracker mortgages for new borrowers were withdrawn last week when the bank slashed its rates

Cheltenham & Gloucester, Abbey and Alliance & Leicester all started marketing new tracker deals to new customers.

But would be borrowers face having to find a bigger deposits for some mortgages, while the margin between the interest rate charged and the Bank rate was wider than previous deals.

For example, Abbey is offering a two-year tracker deal for those paying a 25% deposit, at an interest rate of 4.99%. This is 1.99% above the Bank rate, compared with 1.29% on a similar deal offered at the start of last week.

Brokers had been recommending a number of tracker deals to customers, predicting that the Bank rate would fall.

Aaron Strutt, of Chase de Vere Mortgage Management, said that this advice generally still stood.

“We are expecting the Bank rate to fall further. Lenders will hopefully be introducing more tracker deals, but borrowers should be careful regarding the collars,” he said.

“Lenders are generally offering trackers new deals 2% above the Bank rate. If the Bank rate goes down to 2% or 1%, this is still going to offer fantastic value for money.”

But he criticised lenders for “holding back” on the choice of tracker mortgages available at a time when there was high demand for these types of deals from customers.

Latest figures from the Council of Mortgage Lenders showed that the proportion of new tracker mortgage deals and standard variable rate (SVR) mortgages granted in September grew, while the proportion of fixed-rate deals reduced.

At Last one of the UK leading mortgage lenders release new mortgage rates tomorrow, The Abbey’s new mortgage rates are as follows. Read the rest of this entry »

The Royal Institution of Chartered Surveyors has announced new figures that show the average number of surveys per chartered surveyor over the last three months has fallen to 10.9,the lowest figure since the survey began in 1978.

London was the worst hit area where chartered surveyor estate agents reported only six sales per agency over the past three months, while estate agents in East Anglia and Wales reported just nine sales in the same period. The sales to available housing which RICS claims is an indicator of market and a guide to future house prices - dropped to 13.5% percent, the lowest figure since December 1992, suggesting that further price falls in the short term are likely.Despite all the doom and gloom surveyors reported an increased optimism, with 20% more surveyors expecting an upturn in sales over the next three months than predicting a fall a sharp increase from 4% in September.

The trade body reported falling interest in the market continued to ease for the sixth straight month, as buyer enquiries have risen to their highest net balance for 16 months with 11% more chartered surveyors reporting a fall than a rise in new buyer enquires.

RICS spokesperson Ian Perry commented: “Last week’s interest rate cut should certainly help to support the market now that lenders have agreed to pass on the reduction to borrowers. Even so the general lack of mortgage finance remains a major blockage in the housing market for a large majority of would-be buyers.

Fortunately, many vendors have finally started to accept current market conditions and are dropping their asking prices to achieve a sale. Sales should increase in the coming months as more and more sellers understand that greater realism is the only way to make that long desired move.”

Home owners were celebrating reduced mortgage rates after the Bank of England slashed borrowing costs by 1.5%, wiping nearly £100 monthly off the cost of a £100,000 mortgage.

Borrowers with tracker mortgages felt immediate effect from the rate reduction.

Lloyds TSB and Abbey were the first to state they would be passing on the whole 1.5% cut to SVR customers, pushing Lloyds’ rate down to 5% and Abbey’s to 5.4%.

Nationwide, RBS and the HBOS Group have also cut their standard rates by the full 1.5%. Nationwide’s new 4.69% mortgage costs someone with a £100,000 repayment mortgage nearly £90 monthly less than a month ago, reducing the bill from £655.97 to £566.67.

Halifax new 5% charged across the HBOS Group reduces the monthly cost of that same £100,000 repayment loan from £683 to £591. RBS and NatWest’s standard rates fall from 6.69% to 5.19%. Scottish Widows has also cut to 4.99%, and Northern Rock to 5.84%.

Banks who initially refused to pass on the whole 1.5% cut were hauled over the coals at a meeting with Chancellor Alistair Darling on Friday and told to reduce rates.

Soon after Bank of England announced the cut, lenders rushed to push up their prices by withdrawing virtually every tracker mortgage on the market.

Two years ago you could buy a tracker at 0.25% below base. Those lucky enough to have bagged such a bargain are now laughing as they watch their repayments fall to 2.75%.

But the expectation is that if and when lenders reintroduce trackers, the price could be much higher: anything up to 2.5% above base rate.

For those who have to secure a mortgage or are looking to remortgage, the best deal on the market this weekend is probably HSBC’s base rate tracker, which charges 0.99% above base rate, giving a current pay rate of 3.99%. However, you need a 40% deposit and will be charged a £799 fee.

An HSBC spokesman said: “Business is flooding in at two or three times normal levels, but we are doing everything we can to keep this offer open as long as possible.”

There was some more good news for borrowers when the London Interbank Offered Rate (Libor), which is the interest banks charge each other and which they say mortgages are linked to, did fall sharply. Although still some way ahead of base rate at 4.49%, it is now moving in the right direction by leaps and bounds.

Similarly, Darren Cook, a mortgage expert at Moneyfacts, predicts: “We will see a lot of announcements from lenders during the coming week. The size of the cut took them by surprise. They’ve had to go back to the drawing board again.”