Less homes repossessed but what will happen when the interest rates rise

Posted by Amy Flower in Mortgages on 18 August 2015 - Amy is a Senior Credit Analyst at checkmyfile

New data out reveals that the number of properties repossessed have dropped for the second quarter of the year, as less homeowners fall behind on mortgage payments. The amount of repossessions has declined from 2,500 in the first quarter, with an additional 3,000 in the second quarter. Compared to the same quarter last year, the decline is 5,400, indicating that the low interest rates were keeping the numbers down.

Council of Mortgage Lenders Paul Smee comments, "This trend is very welcome. Low interest rates are acting as a significant support for homeowners in general, and are likely to be helping to stave off low level arrears for stretched households in particular".

CML figures indicate that there are less homeowners falling into arrears and the number of repossessions lowered to 1,800 for owners and 700 for buy-to-let landlords.

Advice is being given to homeowners to be aware of what impact an interest rate rise would mean and if they can afford one. Mark Carney, Governor the Bank of England, has kept the base rate at a record low 0.5% since 2009, with a potential rise beginning from the end of 2015. The planned rise is reported to be made incrementally from 2015 to 2018 at an estimated 0.5% per annum, reaching 5% by 2018.

Homeowners and landlords with high loan-to-value percentage need to be prepared for the increase and the impact this will have on their repayments. Families need to budget for the increase and look at how they can make savings or cut backs to put the extra money towards the increased payments. Landlords also need to crunch their sums to see if and when the percentage rise will have a knock on impact on the rent they are charging and if they also need to increase it. An impact will also be felt by first time buyers, who may also experience more difficulty gaining their mortgage and affording what they need to borrow.

Applying for a Mortgage? Check Your Credit Report

Don’t Get Turned Down, Check it Today

How your credit file could help you get a good mortgage deal

How to use your credit report to get a great mortgage deal in 2019

There have been plenty of reasons to get people thinking about making that first leap onto the property ladder in recent months, including Help to Buy schemes, the removal of stamp duty charges for about 95% of first time buyers and an increase in affordable houses being built.

Published on 20 Nov 2018 by Kiah Phillips

Full Article

Why Mortgages Might Be Agreed In Principle Then Declined

Getting your mortgage Agreed in Principle (also known as a Decision in Principle or AIP) is an important step towards finally getting into a new home, but the relief of getting an AIP can be short-lived if you then get turned down when applying for the actual mortgage.

Published on 29 Oct 2018 by Jamie Mackenzie Smith

Full Article

Am I More Likely to Get a Professional Mortgage?

Before the Credit Crunch of 10 years ago, finding a mortgage valued up to 95% or even 100% LTV and at more than five times your salary level wasn’t difficult - in fact it’s since become clear that it was too easy and was a financial disaster waiting to happen. As such, mortgages have become harder to get accepted for then, with stricter regulations coming into place ensuring that mortgages are only granted to those who can truly afford them.

Published on 14 Sep 2018 by Jamie Mackenzie Smith

Full Article

The best credit score for a mortgage

A lot of customers come to checkmyfile because they plan on applying for a mortgage – your Credit Report is, after all, the best place to start as it’s helpful on more than one occasion. But often the question is often raised: "what Credit Score will I need to get a mortgage for my dream home?”

Published on 8 Aug 2018 by Jamie Mackenzie Smith

Full Article

Last minute mortgage checks

When could a non-bankrupt person be considered bankrupt? When they’re buying a house.

Published on 17 Jan 2018 by Richard Catlin

Full Article

Guarantor loans can affect mortgage applications, lenders warn

Guarantor lenders are always keen to point out that you don’t need a credit report check to get their loan, just a friend or family member who has a good credit history and is able to act as a guarantor. For those with a poor credit rating, this type of loan provides a solution to a problem – they can afford the loan repayments but are unable to get credit due to prior adverse credit history.

Published on 9 Jan 2018 by Kelly Luff

Full Article

Homeownership among 25 year olds halved in 20 years

Homeownership among 25 year olds has more than halved in the last 20 years, according to a survey conducted for the Local Government Association (LGA). The study carried out by Savilles the estate agents found that only 20% of 25 year olds now own a home of their own, compared to 46% in 1996.

Published on 5 Jan 2017 by Erika Bone

Full Article

Housing Values Rise to 5.6 trillion

While housing prices have displayed a consistent rise over the past several years, according to a recent study conducted by Halifax, the total value of privately owned housing in the UK has exceeded £5.5 trillion for the first time.

Published on 14 Dec 2016 by Tom Magor

Full Article

First-time lenders can borrow against parent's home

In recent decades, the “bank of mum and dad” has increasingly become a cardinal resource for their offspring achieving independence and for first-time buyers attaining a foot on that all-important first rung of the property ladder.

Published on 9 Dec 2016 by Erika Bone

Full Article

Buy to let slows as mortgage rate offers begin to increase

In the last few years we have not only seen some historically low mortgage rates, but also a rush to make property investments. Now the tide may finally be turning, as lenders begin to increase their lowest mortgage rates, and buy-to-let figures drop in the wake of new regulations.

Published on 7 Dec 2016 by Kelly Luff

Full Article
keyboard_arrow_left

keyboard_arrow_right

We are rated number 1 for customer service on