A consultation has been launched by the Ministry of Justice with a view to increasing the minimum amounts owed before the sale of a home can be ordered by the courts to force repayment of the debt by the homeowner.

The system that is currently in place means that a charging order can be placed against the property of a homeowner in the event that they are defaulting on repayments on their credit or store cards, and ultimately this can force them to sell the home and repay the money that they owe. The courts can make a decision to force the sale of the property and make the consumer repay the debt even though the debt was not originally secured against the home.

The Ministry of Justice has stated that sales of properties are only forced in a small proportion of cases, and it was therefore rare for people that could not pay their store or credit cards to be forced to sell the home over it. However, it does happen in a small number of cases and the new measures would help to provide greater protection for those that could find themselves in this situation.

An MoJ official said: “important that the government consider whether there is a risk that the numbers will increase due to the current economic situation, and whether this could result in more people losing their homes because of relatively low levels of debt which they are unable to pay.”

Increased protection could be put into place for homeowners in debt is a post from: Glitec Loans

The level of repossessions in the UK soared to such a point that the government has been trying to take action by putting measures into place to try and reduce the level of repossessions.

It has now emerged that the UK’s financial regulator, the Financial Services Authority, has proposed new regulations that could provide increased protection for homeowners that are in arrears with their mortgages.

The FSA has stated that is wants to ensure that homeowners that have fallen into arrears get fair treatment from lenders, and in particular this applies to those that have had to borrow money from specialist lenders.

Part of the new proposals from the FSA include ensuring that homeowners that are not hit with unfair and unnecessary charges by lenders as a result of being in arrears.

The regulator also wants to make sure that repossession action is only taken as a last resort by lenders after all other options have been looked at.

The proposals come as part of a review that the Financial Services Authority has been carrying out into the workings of the mortgage market in the UK. This came after earlier research that indicated some homeowners in arrears were being treated aggressively by lenders.

The FSA stated: “Today’s proposals underline the standards that firms must meet and will help to ensure that homeowners in financial difficulties are treated fairly. Lenders need to be in no doubt of their obligations to customers who fall behind with payments and must realise that such circumstances are not an opportunity to create further profits.”

FSA proposes new rules for those in mortgage arrears is a post from: Glitec Loans

The base rate has been at an all time low of just 0.5 percent for the past ten months, and as such many of the more favourable deals from lenders are the standard variable rate mortgages.

According to reports the popularity of standard variable rate mortgages is continuing to grow, as lenders are offering some very competitive deals as a result of the low base interest rate. John Charcol, the mortgage broker, released figures recently showing that over 80 percent of the mortgages that it arranged in December of last year were variable rate mortgage deals. With many economists predicting that the base rate could remain at this low level for some time to come the popularity of variable rate deals could continue to grow.

The low interest rates on variable mortgages have also affected remortgaging levels, and this is because many of the borrowers that were on special mortgage deals, such as fixed rate mortgage deals, for a period of time are simply allowing their mortgage to revert to the standard variable rate with their lender rather than finding another fixed rate deal or a different deal.

A spokesperson from John Charcol stated: “With the average difference between the fixed rates and the initial rate on the best trackers around 1.5% in favour of trackers, it will currently take a substantial rise in Bank rate for a borrower who takes a tracker to be worse off than one who opts for a fixed rate.”

Continued popularity for variable rate mortgages is a post from: Glitec Loans

The latest survey from Nationwide has shown that in January of this year the average house price increased by 1.2 percent, and this took the annual rate up to 8.6 percent. This has pushed the annual rate of increase up to 8.6 percent.

The average property price in the UK has now increased to £163,481 as a result of the latest increase. The Land Registry also carried out a separate survey, which showed that annual changes in property values had shown an increase for the first time since May 2008.

Officials from the Nationwide have said that house prices have now been increasing for nine consecutive months, and with the rate of increase being at its fastest since October 2007. The lender said that the continuing increase in property prices had come as something of a surprise taking into account that the UK had been in such a long and deep recession of the past year.

The chief economist from the Nationwide stated: “House prices strengthened their upward momentum at the start of 2010, increasing by a seasonally adjusted 1.2% month-on-month in January. Unless there is a fall in property values in February, annual house price inflation is likely to move into double-digit territory next month for the first time since May 2007.”

Nationwide predicts good news for house prices is a post from: Glitec Loans

These short term loans do not generally require a credit check, and many people that need some cash to tide them over until they get paid use pay day lenders to get the cash that they need. Doorstep lenders have also become increasingly popular in the current climate, where many people cannot get the loan that they need through a traditional lender.

However, there are concerns over the interest rates that are being charged by some doorstep lenders, which can lead to low income families – often the ones that rely on these lenders – really struggling to repay the money that they owe. It has now been revealed that these lenders could face having the rates of interest that they charge curbed following proposals that are set to be discussed in the near future at Downing Street.

The Better Banking Coalition has put the package of changes forward, and the group is focussed on getting ‘fair access to credit for all’. The group comprises social enterprises, voluntary groups, and community organisations. Both doorstep and pay day lenders who focus on short term loans for those that would struggle to get money from a mainstream lender will be on the agenda with regards to curbing the rates of interest that they charge.

A spokesperson for the coalition stated: ‘In the worst case, these rates can run at 9,000% a year, and 1,000% is not unusual.’ She added: ‘Financial institutions are not lending enough to enough people and that is having a huge impact. The Government has been working on the issue of financial exclusion for many years, but we do not feel that existing measures are strong enough.’

Interest rates to be curbed on pay day loans is a post from: Glitec Loans

Over the past five decades house prices have risen by around 2.7 percent a year taking inflation into account, according to the lender. However, over the same period annual earnings have gone up by just 2 percent a year, so the increases on house prices have outweighed the increases in wages.

The past ten years have seen the house price increases gain momentum. The study that was carried out by the Halifax looked at house prices on UK properties between 1959 and 2009. One economist from the Halifax said that there had been some remarkable changes in the property market and with property prices over the past fifty years. The figures also showed that owner occupation soared during the 1980s, and whilst in 1961 only 43 percent of homes were owned this had increased to 68 percent by 2008.

Over the same period privately rented homes fell from 33 percent to just 14 percent, although officials claim that an increase in student numbers have seen the number increase slightly over the past twenty years. The research found that there had been four periods where major house price increases had occurred over the past five decades, and these were 1971-1973, 1977-80, 1985-89, and 1998-2007.

Greater London is said to have seen the biggest increases in house prices in the last fifty years according to the research, with the smallest increases being seen in Scotland. In real terms the average property price has increased by around 273 percent between 1959 and 2009 with a typical home costing around £43,000 in 1959 in today’s money.

Houses were more affordable five decades ago than now is a post from: Glitec Loans

Although first time buyers had access to a range of perks such as 100 percent and even 125 percent mortgages the high cost of properties coupled with high rates of interest made it impossible to get onto the property ladder for some.

When the property bubble burst a couple of years ago and house prices started to come down, many first time buyers may have thought that at last they had a chance to get their hands on a property and become a homeowners.

However, this was not to be. Just as property prices started to fall and the base interest rate hit an all time low of 0.5 percent lenders started to be far more stringent about giving out mortgages and started demanding far higher deposits from borrowers. With the 100 percent and 125 percent mortgages no longer available and lenders demanding extortionate deposits of 25 percent and even 40 percent in some cases many first time buyers had to once again put their dreams of homeownership on the back burner again.

However, for those that feel that they will never be able to get onto the property ladder because of high deposit levels or lack of mortgage availability there is one option that could prove to provide a helping hands. Shared ownership mortgages are a great help for many first time buyers as it allows them to get onto the property ladder one step at a time, and means that the process of buying a home becomes more manageable and more affordable.

With a shared ownership property you only have to take out a mortgage for the percentage of the property that you are buying. Some shared ownership properties offer 50 percent of the share, some offer 75 percent, some offer 25 percent, and so on.

If you are successful in getting the mortgage for the share that you are buying you then pay rent towards the remaining share to the appropriate housing association. However, the great thins is that you can slowly buy more shares – known as staircasing – as your situation improves. On the other hand, if you prefer you can continue to just own the share that you have taken the mortgage on and carry on renting the other share indefinitely.

With a shared ownership property you will only need a small mortgage depending on how much your share costs, and you could still end up with a really nice home. What’s more you will only need a small deposit because you will only be borrowing a small amount by way of a mortgage, and this can prove a real help.

You will find that many shared ownership properties are new build properties, so you could find yourself in a smart new home with all the mod cons. If you want to keep costs down further you could opt for a resale, which is where someone that had already bought a share of a property wants to sell their share on to another buyer.

Could shared ownership be the answer to your property dreams? is a post from: Glitec Loans

Over the past couple of years, where finances have been tight for many, homeowners have been under the impression that the vital thing that they had to do was ensure that they were paying their mortgage and secured debts before worrying about unsecured debt, as otherwise they could lose their homes. However, a recent report has shown that some may end up losing their homes anyway for failing to keep on top of repayments on credit cards.

Up until now lenders have not been able to repossess a home for failure to pay on an unsecured debt, as the Ministry of Justice said earlier this year that it would be postponing introducing a new law that would allow lenders to do this. However, it has now stated that the issue is to be open to consultation within the industry starting from next month. The consultation period is set to last for six weeks.

There are worries that giving the green light to lenders to take repossession action for unpaid unsecured debts could lead to unscrupulous lenders taking action for quite small debts on which the borrower has defaulted, and could counteract the effects of any measures that the government has taken in order to try and reduce the number of repossessions.

Repossessions relating to credit card debt could increase is a post from: Glitec Loans

With this in mind the Financial Services Authority has recently announced some changes to the mortgage lending sector, which could cut the risks involved so that this sort of financial meltdown does not occur again, but could also make things difficult for lenders and borrowers, such as those that cannot prove their income.

A number of industry groups and experts have offered their opinions on these changes, with a number of reactions to the changes, as reported in the Guardian, outlined below.

An official from the British Bankers’ Association stated: “When they offer mortgages, the UK’s high street banks pay particular attention to their affordability for each individual customer, considering a range of factors which is not limited to salary multiples or loan-to-value ratios. Therefore the banks welcome the FSA’s similar emphasis in this paper on the overall affordability of the mortgage for the customer, and their focus on mortgage-broking activity and higher-risk lending. It should be a firm principle of mortgage regulation that higher-risk borrowers, such as self-employed people and first-time buyers, are not effectively cut out of the market. The issue that faces all of us – lenders, borrowers and regulators – is ensuring the risk of taking out a mortgage can be shared effectively. Any new rules must not serve to create unreasonable obstacles either for lenders or for borrowers.”

The consumer campaign group Which? has welcomed the reforms, but is concerned over why the FSA left it so long before taking action. A spokesperson for the group said: “We’re pleased that the FSA is looking to take a more robust approach to regulating the mortgage market, although we would like to see tougher measures, such as a ban on mortgages over 100% and the naming of lenders that mistreat their customers. Mortgage providers are already responsible for assessing affordability, so why is the FSA only getting tough on it now? Many borrowers are suffering the consequences of irresponsible lending.”

The Citizen’s Advice Bureau also responded to the changes, stating: Stricter tests to ascertain consumers’ ability to afford a mortgage, banning the sale of mortgage products that put consumers at risk and, in particular, a ban on arrears charges when borrowers are already repaying, should ensure enhanced protection for borrowers which is long overdue. Citizens Advice would like assurance that the measures requiring mortgage advisers to be personally accountable to the FSA will work in practice. We would also like to see uniform consumer protection for all secured lending and for the FSA’s scope to cover this, as well as lending secured on a home.”

The Council of Mortgage Lenders’ Michael Coogan stated: “We agree with the FSA that regulation in itself cannot resolve the problems of the recent market. However, we also agree that clearly delineated responsibilities, which remove regulatory ambivalence, will help lenders, intermediaries and consumers to know where they stand, and to accept the consequences of their actions. As always with regulatory change, the devil may be in the detail. But we welcome the consultative approach, and look forward to working with the FSA to ensure that the objective of regulatory fairness between lenders, intermediaries and consumers is achieved in practice.”

Experts give opinions on FSA mortgage lending regulation changes is a post from: Glitec Loans

Agencies such as the Council of Mortgage Lenders attacking these plans and stating that millions of people who are on irregular incomes will now be frozen out of the mortgage market because of these new regulations.

However, the FSA has recently spoken out and said that those on irregular incomes will not be frozen out of the market providing they are genuine. The FSA was slated recently after branding these self certification mortgages ‘liar loans’ with the Council of Mortgage Lenders stating that not all people that have self cert mortgages are liars, and that most are genuine people that cannot prove their income in the usual way.

However, the FSA argued that genuine self employed people with irregular incomes would still have a way in which they could prove their income, and therefore would not necessarily be frozen out of the mortgage market. Lesley Titcomb from the FSA said that those suggesting that all self employed and contract workers would be unable to get a mortgage following the ban on self cert mortgages were ‘way off the mark’.

She added that there was no reason why a genuine self employed or contract worker would not be able to prove their income. She said: “Some have suggested that this means a self-employed person or a contract worker would not be able to get a mortgage and that we are blocking access to the market. This is way off the mark. We can think of no reason why the self-employed or a contract worker would not be able to verify their income.”

Ban on self cert mortgages will not cut off everyone with an irregular income is a post from: Glitec Loans