ROOF Blog

Nationwide has launched a new 125 per cent mortgage, for those in negative equity and wanting to move house. The building society described the product as a ‘niche’ offer and said that the new mortgage would only be available to existing mortgage holders and would allow homeowners to ‘carry over’ their negative equity. Experts say it could help people stick in their homes who need to move, and expect other lenders will launch their own versions in the coming months.

According to the latest National Housing Planning and Advice Unit’s survey on housing, attitudes to new housing developments need to change ‘as a matter of urgency’. More than half of current homeowners (51 per cent) would object to new housing being built in their area, despite continuing home affordability issues where as many as 90 per cent of young people cannot afford an average first-time buyer’s house. By comparison less than a third of non-homeowners (31 per cent) would object. Despite the average house price fall of 22 per cent, almost nine out of ten young people cannot afford to buy an averagely priced first-time home.

Nearly half of people having difficulties paying their mortgage do not seek advice, often because they feel their problems are not serious enough or they do not know where to go for help. Of those who sought advice, two-thirds went to their mortgage lender, while one in four got help from Citizens Advice. The Financial Services consumer panel which produced the figures and which advises the Financial Services Authority said there was an ‘urgent need’ for more investment in information and advice, so consumers understand that debt advice agencies must not be ‘seen as a last resort’.

The number of mortgage products on the market has dropped to its lowest level on record, with homeowners having a choice of just 2,282 deals. First-time buyers have even less choice with 1,195 products available according to moneysupermarket.com, compared with the height of the property boom in August 2007 when more than 30,000 mortgage deals were available, and almost 20,000 for first-time buyers alone.

John Healey has revealed that the government plans to withdraw backing for the open market homebuy scheme, saying he wants to concentrate on new build home ownership schemes instead. The homebuy scheme has so far helped more than 14,000 people onto the property ladder and plans to close it have angered housing associations who administer the schemes.

Homeowners paid a record amount off their mortgages in the first three months of 2009 according to statistics from the Bank of England. An estimated £8.1 billion was repaid – the highest sum repaid since records began in 1970 – taking the total for the year to the end of March to £76 billion. From 2000 to 2008 homeowners had borrowed more than £300 billion against the raising value of their properties.

John Healey has announced plans to set up a new central team to fast track urgent home repossession cases from next month. He defended the government’s effort to help struggling homeowners saying it has put into place help ‘at every step of the way’ and to ensure that lenders can only repossess homes as a last resort. More than a thousand households a month were being helped under the mortgage rescue scheme, the minister said.

The latest figures of those homeowners approaching the mortgage rescue scheme for help in paying mortgages have been released today. A further four households have been accepted, bringing the total to six which have benefited, but the number approaching the local authorities for help has remained steady.

Gordon Brown is expected to announce a proposal that will require councils to take account of applicants’ connections to the area when allocating homes, as part of a multi-million pound plan to build more affordable homes. The prime minister hopes the move will increase stock in both council housing and affordable private homes in the coming two years, while creating thousands of new jobs in the process. Funds will be made available to the HomeBuy Direct scheme which helps first-time buyers into the market, while councils will be given discretion to provide social housing to local people even if they are not considered priority cases.

Shelter has warned the government and mortgage lenders to start preparing for a second wave of arrears and repossessions that will hit the UK in the next two years. It says hundreds of thousands of homeowners face being repossessed or falling into arrears as the effects of rising unemployment, higher interest rates and mortgage support schemes ending start to take effect. Shelter has seen a 250 per cent increase in the number of calls to the helpline regarding mortgage arrears in the past year.