House purchase applications rose month on month in March by 11.6% and were up 20% year on year. This is according to Mortgage Advice Bureau and Coreco Group index.

Head of lending at Mortgage Advice Bureau, Brian Murphy, commented:

\”March figures are encouraging and continue the positive start to the year with another month-on-month increase in borrower activity. This reinforces the belief that a more stable market is slowly returning.\”

\”Although remortgages are still significantly up on 12 months ago, with transaction levels in March at their highest level in any one month since April 2008, numbers do appear to have reached a plateau. We may well see remortgage transactions dropping off further in April with inflationary pressures easing, making it less likely that we will see a rate rise before the summer.\”

\”Following a slight rise in the cost of the average two- and five-year fixed rates during March, pricing has fallen back marginally this month, although conversely average two-year tracker rates have ticked back up a little.”

These figures suggest a resurgent housing market that will support the slew of contractors looking for their perfect home. Contractor mortgage products are starting to reflect the demand that has arrived in recent months.

The maximum loan amount on interest only mortgages on Lloyds Banking group has been raised to £1m from £500k. This is only in branch for now but represents a reversal of the cap they had put in place last year.

The evidence of repayment vehicles would have to be assessed, a spokesperson for Lloyds stated:

“It is absolutely our aim to have the same processes in place for interest only across all of our distribution channels. Requiring evidence of repayment vehicles is a very important step and allows us to review changes we made in earlier stages.”

This would be a great trend to see in contractor mortgages, contractors in the high income bracket would benefit from an increased loan limit. We hope to see contractor friendly lenders take the initiative in providing greater choice of products.

Nationwide is to cut its three year fixed rate deals today, by 0.2 % across the board. Nationwide joins a growing number of mortgage brokers that have cut their fixed rate deals and this trend looks set to get stronger.

Nationwide\’s head of mortgages, Martyn Dyson, commented:

\”Whether you\’re buying a house, remortgaging or switching at the end of your Nationwide mortgage deal, you\’ll be able to take advantage of our improved three-year fixed rates.”

\”Switcher customers continue to receive £300 cash-back, plus are able to enjoy rates that are no higher than those for house purchase and remortgage customers.\”

Ultimately it is uncertainty in the base rate that has made fixed rate deals a hive of activity and contractor mortgage deals will be no different. Whatever your stance on risk is, if you choose to get a mortgage, you will want to ensure that you get maximum choice and we will be able to provide that for you.

All product and arrangement fees have been removed from two, three, and five year fixed rate mortgage deals from ING Direct. Their deals were already competitive so this will create fierce competition in the mortgage market place.

Mortgage director of ING Direct, Julian Hartley, stated:

“We have been seeing increased speculation about Bank of England Base rate increases and this is already feeding through into more enquiries about fixed rate products.”

“Our economists are advising us that when rates do rise, they may do so more steeply than many pundits are predicting. It is interesting to note that historically when rates do start to increase it is at a faster pace than expected.”

“We are looking to expand our mortgage business and it makes sense to increase the appeal of our fixed rate products at a time we predict they are going to be more in demand.”

As a company ING direct are not normally contractor friendly, but these competitive forces have a tendency to filter down into contractor mortgage products.

Author Bio: Article written by Taj Kang, Associate Director at Contractor Mortgages Made EasyTo contact us regarding this article e-mail: media@contractormortgagesuk.com

Category: Finances
Keywords: mortgage, contractor, mortgages, contractors