Controversial plans to abolish printed cheques by 2018 have now been scrapped, the bank trade body, the Payments Council, has announced.
The group, which represents banks and payments groups, has now said cheques will be available to bank and building society customers for “as long as customers need them”.
Work started last year on an alternative paper-based system, but the Payments Council said it had now decided that this was no longer the best option and that “retaining the cheque is a better approach”.
Richard North, Chair of the Payments Council said: “Listening to over 600 stakeholder groups, working with the banks and following our appearance before the Treasury Select Committee, we have concluded we should reassure customers that the cheque is staying.”
Friday, 22 July 2011
Wednesday, 13 July 2011
Loan numbers for home buyers increase - CML
The number of loans for house purchase and remortgaging both increased in May, showing further signs of stabilisation in the mortgage market, according to new data from the Council of Mortgage Lenders. However, lending volumes are still weak on a historic basis.
There were 41,500 loans worth £5.9 billion advanced for house purchase in May, up from 40,800 (£5.9 billion in value) in April.
Despite the monthly increase in house purchase activity, it is still below the level seen in May last year (43,800 advances worth £6.3 billion).
Remortgage lending picked up slightly in May. Some 29,000 remortgage loans were advanced, worth £3.6 billion, compared to 24,700, worth £3 billion, in April.
Compared to May last year, remortgage lending has increased by 9% in value, but remains below the recent peak in March (£4.1 billion).
The majority of borrowers continued to opt for fixed-rate mortgages in May (62%). It is likely that borrowers prefer the certainty of mortgage payments in a period when future interest rate movements are uncertain. Only 22% of all borrowers chose tracker mortgages in May. This represents a significant change from May 2010 when fixed rates were less popular at 46% and tracker mortgages more popular at 36%.
Lending to first-time buyers was virtually unchanged in May: 15,900 first-time buyer loans were advanced compared with 15,800 in April. The value of these loans remained unchanged in May at £1.9 billion. Compared with May last year, first-time buyer activity has fallen by 2.5% in volume (from 16,300) and 5% in value (from £2 billion).
First-time buyers borrowed on average 80% of their property's value in May for the second month in a row. This is still well below the 90% that first-time buyers typically borrowed before 2008, but has eased a little from the 75% experienced throughout 2009 and early 2010.
In May this year, only 3% of first-time buyers took out an interest-only mortgage. Before 2008, it was typical for around 30% of loans to first-time buyers to be on an interest-only basis.
The number of mortgages advanced to home movers edged up in May to 25,600 advances from 25,000 in April, while the value of loans advanced stayed the same (£4billion). This is an increase of 2.4% by volume compared with April. There were larger year-on-year falls in lending to this group than in the first-time buyer sector, down by 7% in volume compared with May last year.
Home movers have typically borrowed just below 70% of their home's purchase price since the middle of 2009 and this continued in May.
CML director general Michael Coogan said: "Over the coming months seasonal factors are likely to push up lending for house purchase. There is no evidence of any drastic changes on the horizon or any significant shifts in direction for the mortgage market. These stable conditions are expected to continue for the rest of the year.
"Funding market conditions appear a little more positive. For example, recent securitisation deals suggest confidence has returned as investors regain their appetite to invest in bonds backed by mortgage assets. Overall this is a positive influence on mortgage market conditions."
There were 41,500 loans worth £5.9 billion advanced for house purchase in May, up from 40,800 (£5.9 billion in value) in April.
Despite the monthly increase in house purchase activity, it is still below the level seen in May last year (43,800 advances worth £6.3 billion).
Remortgage lending picked up slightly in May. Some 29,000 remortgage loans were advanced, worth £3.6 billion, compared to 24,700, worth £3 billion, in April.
Compared to May last year, remortgage lending has increased by 9% in value, but remains below the recent peak in March (£4.1 billion).
The majority of borrowers continued to opt for fixed-rate mortgages in May (62%). It is likely that borrowers prefer the certainty of mortgage payments in a period when future interest rate movements are uncertain. Only 22% of all borrowers chose tracker mortgages in May. This represents a significant change from May 2010 when fixed rates were less popular at 46% and tracker mortgages more popular at 36%.
Lending to first-time buyers was virtually unchanged in May: 15,900 first-time buyer loans were advanced compared with 15,800 in April. The value of these loans remained unchanged in May at £1.9 billion. Compared with May last year, first-time buyer activity has fallen by 2.5% in volume (from 16,300) and 5% in value (from £2 billion).
First-time buyers borrowed on average 80% of their property's value in May for the second month in a row. This is still well below the 90% that first-time buyers typically borrowed before 2008, but has eased a little from the 75% experienced throughout 2009 and early 2010.
In May this year, only 3% of first-time buyers took out an interest-only mortgage. Before 2008, it was typical for around 30% of loans to first-time buyers to be on an interest-only basis.
The number of mortgages advanced to home movers edged up in May to 25,600 advances from 25,000 in April, while the value of loans advanced stayed the same (£4billion). This is an increase of 2.4% by volume compared with April. There were larger year-on-year falls in lending to this group than in the first-time buyer sector, down by 7% in volume compared with May last year.
Home movers have typically borrowed just below 70% of their home's purchase price since the middle of 2009 and this continued in May.
CML director general Michael Coogan said: "Over the coming months seasonal factors are likely to push up lending for house purchase. There is no evidence of any drastic changes on the horizon or any significant shifts in direction for the mortgage market. These stable conditions are expected to continue for the rest of the year.
"Funding market conditions appear a little more positive. For example, recent securitisation deals suggest confidence has returned as investors regain their appetite to invest in bonds backed by mortgage assets. Overall this is a positive influence on mortgage market conditions."
Wednesday, 6 July 2011
Home buyers urged not to forget survey
For many people, buying a home is one of the biggest decisions they will ever make. However, by failing to commission a survey before purchase, homebuyers across England and Wales are risking potential bills running into thousands of pounds.
According to RICS research, a quarter of all homebuyers who fail to have a survey are forced to undertake unplanned building works to their property after purchase.
The average bill for these works, such as damp proofing or repairing a roof, is over £1800 - but the cost can be much higher.
A common misconception is that a mortgage lender's valuation report represents a survey when in fact, it is merely a valuation carried out on the mortgage lender's behalf and is not designed to highlight any potential problems with the property. By commissioning a home survey, any structural problems or urgent defects are highlighted, enabling the buyer to make an informed decision before committing to the property.
The RICS Condition Report is a new home survey which is both simple and affordable. Designed for newer properties and conventional homes, it provides a clear report on the condition of the property, plus details of urgent faults and advice for legal advisors. It does not provide an additional valuation, but sits alongside a mortgage valuation.
Alongside the Condition Report, RICS offers two additional surveys, tailored to the type and age of a property:
According to RICS research, a quarter of all homebuyers who fail to have a survey are forced to undertake unplanned building works to their property after purchase.
The average bill for these works, such as damp proofing or repairing a roof, is over £1800 - but the cost can be much higher.
A common misconception is that a mortgage lender's valuation report represents a survey when in fact, it is merely a valuation carried out on the mortgage lender's behalf and is not designed to highlight any potential problems with the property. By commissioning a home survey, any structural problems or urgent defects are highlighted, enabling the buyer to make an informed decision before committing to the property.
The RICS Condition Report is a new home survey which is both simple and affordable. Designed for newer properties and conventional homes, it provides a clear report on the condition of the property, plus details of urgent faults and advice for legal advisors. It does not provide an additional valuation, but sits alongside a mortgage valuation.
Alongside the Condition Report, RICS offers two additional surveys, tailored to the type and age of a property:
- RICS Condition Report: A clear, concise picture of the property with "traffic light" ratings. It shows the condition of the property, offers advice to legal advisors and highlights details of any urgent defects. The lowest priced of the surveys; it is aimed at conventional properties and newer homes;
- RICS HomeBuyer Report: Contains all the features of the Condition Report, plus a market valuation and insurance rebuild costs. It also includes advice on defects that may affect the value of the property with repairs and ongoing maintenance advice.
- RICS spokesperson, David Dalby, said: "In difficult economic times it pays to be prepared. Nobody wants to be left with a home that needs extensive repairs or one they can't sell on. By having a survey you'll be armed with information on the condition of the property which puts you in a stronger position to decide whether to proceed with the purchase, or negotiate a better deal.
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