PT Mortgages Blog

Hello and welcome to the first ever PT Mortgages blog. In these blogs we will be looking at the major issues, and helping to answer your questions and keep you up-to-date with the latest developments in the mortgage market. A small warning – the following two paragraphs are incredibly depressing, but things do pick up slightly after that.

You can’t have failed to notice that mortgage-related stories have been dominating the headlines over the last few months, and this situation looks likely to continue for the foreseeable future as the credit crunch takes hold. One of the latest of these headlines concerns the end of the 100% mortgage era following Abbey’s decision to withdraw the last remaining deal. To put this in perspective, there were 158 100% mortgages available this time a year ago, according to Moneyfacts.

For first-time buyers, this means that they will now need to find a deposit of at least 5% which, as the average cost of a first time home is £148,000 according to the Council of Mortgage Lenders, means they will need to save nearly £7,500. But the forecast is even worse: experts have predicted that lenders will eventually move away from 95% deals, and ask for at least a 10% deposit. As house-prices fell 2.5% in March, the fastest rate since 1992, this move would be understandable; research by Experian suggests that 75,000 households could end up with negative equity by the end of 2008, many of whom will have taken 100% deals, or more, to buy their first home.

So is it all doom and gloom? Well, no, there are still choices available. For first-time buyers, there is still the option of a guarantor mortgage, although how long this will be available is already the subject of speculation. For home-movers or remortgagers there are more options. There are now around 4,700 mortgage deals available, a decrease of around 10,000 since last year according to Moneyfacts, so choice is becoming more limited. But this means that there is still choice.

The best advice is to act quickly – the lack of products available has led to a surge in demand for the better deals, and this in turn has led to lenders being swamped with applications. This has the knock-on effect of significantly increasing lenders’ processing times, meaning that mortgages are taking much longer to complete. The best deals are disappearing from the market on a daily basis, as lenders withdraw them to try to clear their backlogs. So if your deal ends later this year, it’s never too early to start looking for a new one. Speak to your existing lender to see what they can offer you, and then speak to us at PT Mortgages to see if we can find you a better deal.