Mortgage approvals rose from 46,967 in February to 48,979 for the month of March. This marks a 4.3% increase month on month, the third such increase in a row. This translates to a 4.3% increase in contractor mortgage approvals if they are in line with standard mortgage products.

The overall Loan to Value (LTV) increased from 56.3% in March 2010 to 60.8% in March 2011. This indicates an increase in First Time Buyers (FTB’s) in the market.

Business development director of e.surv, Richard Sexton, commented:

“More people are getting higher LTV mortgage loans, and approvals on cheaper properties have increased, which is a sure indication that more first time buyers are finally getting onto the housing ladder.”

“Rents have reached record levels and with higher LTV products available for the best borrowers, it’s no wonder more first-timers are grasping the nettle while rates are still cheap. Homeownership looks good value, especially if you fix your rate – more of them are realising this and getting onto the ladder.”

“Yes, March is historically a cheery month for the market, but the brisk increase of approvals since January and the steady rise of LTV’s indicate that the effects of a stuttering economy on the mortgage market may have been overplayed.”

Let’s hope these trends continue and bring confidence back to the market. Contractor mortgages are one of the positives we can look to for growth in the coming year. We now have more options than ever for contractors looking for a mortgage.

In other news, Abby has reduced its two year tracker rate mortgages to 2.79% and reduced its two year fixed rate mortgages by 0.1%. Abby aren’t generally contractor friendly but this adds further pressure to other lenders to drop their rates.

Managing director at Abbey, Alan Mathewson, stated:

“We are committed to offering a highly competitive range of mortgages to meet the needs of borrowers and we are pleased to be able to support intermediaries and their clients with these latest rate reductions.”

“We expect to see strong demand for these products from both homebuyers and remortgagers alike.”

Contractor mortgage products are seeing similar price drops and this is leading to better options for contractors all the time.

Also the Halifax House Price Index has shown a month on month increase in house prices of 0.1% in March. This modest growth is compared against a quarterly change of -0.6% and annual change of -2.9%.
Housing economist, Martin Ellis, commented:

\”House prices continue to fall at a modest pace as measured by the quarterly rate of change, the best measure of the underlying trend in price movements. Prices in the first quarter of 2011 were 0.6% lower than in the fourth quarter of 2010. There was a 0.1% rise in prices in March and prices were a similar amount above those at the end of 2010.\”

\”Our forecast remains for a 2% decrease in house prices in 2011 as a whole. Uncertainty over the general economic outlook and individual financial circumstances are likely to constrain housing demand, resulting in some modest downward pressure on prices.\”

Variations in house prices can impact you differently depending on your financial situation, this would usually mean home owners benefitting from an increase. However, the change in house prices this month has been very small, I doubt it has caused a significant change in outlook for home owners and non-homeowners alike.

The recent contractor mortgage product growth that we have seen has yet to have a significant effect on house prices.

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: Contractor Mortgage, Contractor, Mortgage, Contractors, Mortgages