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For years, it has been the main High Street banks that have dominated the UK mortgage market. Now though, it is building societies that are increasing their market share and offering some of the best lending rates. If you're looking to buy a new property, it's increasingly likely that your next mortgage could be with a mutual lender.
Coventry building Society has today (9th August 2012) launched a new range of mortgages aimed at first-time buyers, fixed until 30th September 2017, with a maximum loan-to-value (LTV) of 85% to 90%. With low fees and free valuation included, the lender hopes to entice cash-strapped borrowers who want to minimise their outgoings when they purchase their home.
A leading mortgage trade body has called on the government to do more to help the housing and mortgage market in the UK. The Association of Mortgage Intermediaries (AMI) believes that the government needs to do more to get the economy moving including increasing expenditure on capital projects and providing more incentives for new-build properties.
Major lender Santander has announced that with immediate effect, it is cutting interest rates on its range of fixed-rate NewBuy mortgages. This is excellent news for homeowners and first-time buyers with only 5% to put down on a new home who want to use the government-backed NewBuy scheme to secure a new-build property in England up to the value of £500,000.
Two of the UK's biggest lenders have reduced their lending rates this week and increased the range of deals available to broker clients. Abbey for Intermediaries, part of the Santander group, and Halifax have improved their deals this week and the changes have been welcomed by mortgage brokers.
A month ago, the government trumpeted its new initiative to get the mortgage market moving. The Funding for Lending scheme was designed to give banks and building societies access to funds at low interest rates, allowing them to lend these to households and small businesses in the form of loans.
Two major lenders, Halifax and First Direct, have announced cuts to interest rates on a number of tracker- and fixed-rate mortgages in their respective ranges. Some 37 of First Direct's range of 42 home loan products have been reduced, while the cuts to Halifax products apply to a range that are available through intermediaries.
Among the best deals now available from First Direct at rates 0.50% lower than previously are:
The number of first-time buyer mortgages advanced in May 2012 was up by over a fifth compared to the same month last year. In a sign that the slump following the end of the stamp duty ‘holiday' is over, data showed that first-time buyers borrowed £2.3 billion in May 2012, up by almost 50% on April's figures. Mortgage lending was also up across the board, suggesting a small recovery in the housing market.
It has always been possible for borrowers with larger deposits to secure better mortgage deals. Now, however, a leading newspaper has told homebuyers that they are facing a "two-tier mortgage market" with the gap between large and small deposit deals growing by the month. The Daily Mail reports that "borrowers with deposits of 5% or 10% of a property's value can find themselves paying more than double the mortgage interest of those with 30% to 40% equity in the property".
Effective immediately, major lender Halifax has scrapped upfront fees on a range of two-year fixed-rate remortgage products. This comes after an announcement last week that Halifax was reducing interest rates on all its two-year fixed and tracker rates for remortgage customers by 0.20%.
Halifax estimates that this could save up to £1,760 for the average remortgage customer, factoring in product fees, a mortgage account fee, standard legal fee and valuation fee.