Libor fines awarded to military charities

A total of £35m has now been distributed to armed forces charities

The latest tranche of money gathered from UK banks in Libor fines has been allocated to 24 military charities.The £12m instalment will be used to fund projects including housing and mental health support schemes for military veterans.

It means a total of £35m has now been distributed to 96 charities from fines imposed on the banking industry for rigging the benchmark interest rate.

During the Autumn Statement a further £100m was made available. Chancellor George Osborne said of the latest instalment: “It is right that money paid in fines by people who demonstrated the worst of the values in our society is now being used to help and support those who demonstrate the very best.”

The biggest donation, of more than £2.5m, will go to Veterans First Point – a charity staffed by military veterans – to establish a number of mental health support centres in Scotland.

‘Debt of gratitude’
Houses for Heroes Scotland has been awarded £1.9m to build low-rent houses for wounded forces personnel and their families.

Welsh charity Change Step will receive nearly £1m to develop and fund a support network for veterans for the next two years.

And homeless veterans in Wales will be provided with resettlement and employment opportunities by Alabare Christian Care, which was awarded £976, 269.

In Liverpool, AF&V Launchpad was awarded £907,632 to provide accommodation to veterans and help them secure work.

Elsewhere, Defence Medical Welfare Service will use nearly £900,000 to provide forces personnel across the UK with additional hospital welfare and psychosocial support.

The Royal Navy Service Family Accommodation will use £800,000 to fund upgrades to 15 play parks across Royal Navy estates and Combat Stress will use £575,268 to provide a 24-hour helpline for veterans.

During the Autumn Statement, the chancellor announced that a further £100m distribution of Libor fines would “reflect our society’s debt of gratitude to our servicemen and women, and their families” and would be extended to those who “care for the work of our police, fire and ambulance services”.

Improvement predicted for mortgage market in 2014

The housing and mortgage markets are set to continue to show greater levels of activity in 2014, according to the latest forecasts from the Council of Mortgage Lenders.

However, the CML sees an unbridled housing boom as unlikely. Indeed, given the already stretched nature of household finances, the new regulatory environment and the likely future course of interest rates, housing market activity may well ease back of its own accord.

The CML is forecasting a rise in gross lending from an estimated £170 billion this year to £195 billion next year, and £206 billion in 2015. The CML anticipates that net advances are likely to rise from £10 billion this year to £15 billion next year and £20 billion in 2015.

The CML anticipates that the number of mortgages 2.5% or more in arrears is likely to stay stable next year at around 150,000, but rise modestly to 160,000 in 2015. The number of repossessions is expected to fall from around 30,000 this year to 28,000 next year before returning to 30,000 in 2015.

In terms of specific features currently influencing the mortgage market, the CML suggests that the volumes of business written under the new Help to Buy mortgage guarantee scheme may be relatively modest, “such that it has a smaller but more positive market impact than many commentators suggest”.

The CML’s forecasting horizon covers a period when the Bank of England may consider increasing interest rates. While this is likely to have a greater impact from 2016, the benign period of falling arrears and possessions may be coming to an end – although most households will cope with the transition to more normal interest rates.

CML chief economist Bob Pannell concludes: “Gross mortgage lending climbs above £190 billion next year, its highest level since 2008. While this is largely on the back of the continuing revival in housing market activity, we also expect to see a meaningful turn-round in re-mortgage activity.

“Despite a strong pick-up in gross mortgage lending, we have pencilled in relatively modest net lending figures – £15 billion in 2014 and £20 billion in 2015. While this would mark a climb out of the sub-£10 billion doldrums, where the market has languished since the credit crunch, it does nevertheless represent a rather muted position. This reflects, among other things, our view that some households will use the relatively benign economic conditions to prioritise debt repayments, ahead of medium-term interest rate rises.

“We think there are good grounds to be optimistic that the vast majority of households will cope with a slow but certain transition to more normal interest rates. This seems to be the game-plan which the Bank of England has in mind, but presumes (as we do) that the UK avoids a destabilising housing boom over the next few years.”

Lending for house purchase reaches a six year peak

The Council of Mortgage Lenders (CML) found that September saw an Increase by a significant 34 per cent in first-time buyer lending, with 23,600 taking out home loans, compared to the same month last year and despite a decline of 12 per cent from August.

The typical first-time buyer income multiple continued an upward trend as they typically borrowed 3.39 times their gross income. Despite this, the continued downward drift in mortgage interest rates have kept borrowers’ payment burden low.

Overall the usual seasonal dip seen in mortgage lending in September was no different this year but was up by 20 per cent compared to the same month last year, with lending in the third quarter at its highest since 2007.

There were 52,800 loans for home owner house purchase in September with a total value of £8.4 billion, down by 14 per cent on August. Overall in the third quarter of 2013, there were 170,700 house purchase loans advanced, worth a total of £27.1bn, which is the highest quarterly figure since the fourth quarter of 2007.

Loans advanced to home movers totalled 29,100 in September, which was down in volume by 16 per cent compared to August but up by 11 per cent compared to September last year. Home mover loans totalled £5.2bn in value in September, which was down 13 per cent on August but up 18 per cent compared to last year.

Home-owner remortgaging showed strong growth in September with a total of 32,900 remortgage loans advanced in the period, up 20 per cent compared to August and 36 per cent on September last year. This totalled £4.7bn in value, an increase of 24 per cent on August and 47 per cent in value compared to September 2012.

Buy-to-let lending in the third quarter of 2013 grew with 43,900 loans advanced in this quarter which was up 16 per cent on the second quarter of 2012 and 36% compared to last year. These loans were worth £5.7bn which was up 19% on the previous quarter and 43% up compared to the same period last year.
Director general of the CML Mr Paul Smee, was quoted saying,: “First-time buyers were a key driver in the first half of 2013 but now home movers and remortgages are showing renewed strength which puts the market in a good position to continue momentum into the final few months of 2013 and the New Year.”
Managing director of Phoebus Software Mr Paul Hunt had said,: “By almost any measure you use, it’s clear that lending levels improved drastically in the last few months. The mortgage industry has found a way to sustainability and significantly boost activity in the property market.

“There are many new signs of life: house purchase lending is up by a fifth compared to a year ago and first-time buyer activity has jumped significantly. Lenders have been proactive in their approach to lending and their innovative steps to improve mortgage availability have heated up the mortgage market. Some of the roadblocks are being knocked off the pathway for prospective buyers, and the number of mortgage deals on the market has increased rapidly. As the Help to Buy scheme gains momentum it should kick-start the housing market from the bottom tier. Without doubt, the mortgage market is taking steps towards fertile grounds.”

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Do you understand the Help to Buy Mortgage Guarantee scheme?

According to an independent survey commissioned by the Building societies Association BSA Consumers who are looking to purchase their first home or move house are confused by the mortgage guarantee element of the government’s Help to Buy scheme.

The BSA survey suggests, 43 per cent of those actively looking to buy a residential property are confused about the benefits on offer through the scheme.

In addition, 31 per cent of consumers who are looking to buy or move admit they do not know whether there is a difference between a 95 per cent mortgage offered by a lender which has signed up to the scheme and a 95 per cent mortgage from a lender which hasn’t.


Results from the survey show that:

• 18 per cent of first time buyers and 17 per cent of home movers believe that they can borrow more through this scheme than with a ‘standard’ 95 per cent loan.


• 12 per cent of both first time buyers and home movers believe that their monthly repayments will be lower as a result of taking a Help to Buy: mortgage guarantee loan.
• One in ten first time buyers (just 5 per cent of home movers) believe that the scheme will protect them if they cannot keep up their monthly payments.


• 12 per cent of first time buyers (just 6 per cent of home movers) say that Help to Buy: mortgage guarantee will protect them if their house price falls.


• 24 per cent of first time buyers and 22 per cent of home movers say that they are more likely to be approved for a Help to Buy mortgage.

In fact not one of these suppositions is true. The Help to Buy: Mortgage Guarantee Scheme has been designed to encourage more lenders to lend to borrowers with small deposits, increasing the availability of this type of loan. The mortgage that an individual consumer receives and the approval process they go through, are subject to the same lending rules whether a mortgage is inside the Help to Buy scheme or not. When considering the affordability of the Help to buy: mortgage guarantee loan, until the new FCA rules related to the Mortgage Market Review come into force in April 2014 borrowers may well be subject to stricter requirements then they would be otherwise.

The introduction of and the publicity surrounding the two Help to Buy schemes has had a positive effect on consumer confidence and is likely to increase the overall volume of higher loan to value ratio lending, as some banks get back into this market. Some lenders, particularly many building societies, have consistently offered loans requiring deposits of five or 10 per cent and continue to do so outside the Help to Buy Scheme. Borrowers may find that they have a wider choice than they expected when shopping around for a low deposit loan.

Paul Broadhead, BSA head of mortgage policy was quoted as saying: “It is unsurprising that some consumers are finding the Help to Buy: Mortgage Guarantee Scheme difficult to get their heads round. The situation has been complicated by the launch of two very different schemes both called Help to Buy.
“It is essential that providers offering loans under the scheme leave applicants in no doubt about the terms of their mortgage loan. I am particularly concerned that a reasonable minority of active first time buyers believe that they can borrow more than normal and that they are in some way protected – neither assumption is true. In fact a 95 per cent mortgage through Help to Buy: mortgage guarantee is exactly the same as a standard 95 per cent mortgage. It is vital that these myths are dispelled at application to prevent the possibility of consumers misunderstanding their mortgage loan and later feeling misled.”

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Top tips to a secure property this winter

Although aimed at tenants this advice can also help home owners. We are all reminded to be vigilant with security as the dark nights get longer to avoid burglaries to our homes.

President of the Association of Residential Letting Agents (ARLA), Susan Fitz-Gibbon, was quoted saying: “Many responsibilities for the security of a property are divided between a landlord and tenant, and it is important that renters know which elements they should look out for during a tenancy. While crime rates vary across the country and within cities and towns, it is always sensible to take precautions to reduce risks to you and your possessions.

“With regard to financial risk, tenants can often undervalue the cost of their possessions and this issue can be particularly acute in shared accommodation. Should the worst happen, the blow of a burglary can be reduced by having adequate insurance in place and copies of receipts for expensive items.”

ARLA has the following security advice for tenants:

Protect your contents:
While the landlord will be responsible for ensuring they have buildings insurance, it is the tenant’s responsibility to insure their own personal possessions. Many insurance companies will offer specific ‘sharer’ packages for those living in larger homes – and always remember that your possessions may be worth more than you think.

Ask the right questions:
If you have any concerns about the local area, ask the agent if the property has any history of burglaries. Under the new consumer protection regulations, agents are now obliged to disclose information that could affect your transactional decision. If you do wish to request additional security, such as a chain on the front door, make sure any changes are agreed in writing before signing the tenancy agreement.

Arm the alarm:
If your rental property has an alarm, familiarise yourself with how it works and make sure you are provided with a new pass-code by the landlord or agent. If the system relies on sensors around the home, remember to check the batteries on a regular basis. Remember that some contents insurance policies will only pay out if your alarm was enabled at the time of the burglary.

Mind that letterbox:
It’s not the most innovative tactic but thieves still employ letterbox theft to obtain car or house keys. Poles are often used to hook keys from hallway entrances, so keep valuables well away from the front door.

A problem shared:
If you are living in shared accommodation, be sure that all renters are responsible when shutting the front door. There is no easier target for opportunist thieves than an unlocked front door or one left with the lock on the nib. Your landlord or managing agent should provide you with keys for all locks on external doors, and be sure to request them if they are not made available to you when moving in.



More indepth advice is availabe from the Met Poloice via their web pages found here:
Operation Bumblebee Crime Prevention

Help to Buy: mortgage guarantee available 3 months early

Help to Buy: mortgage guarantee scheme to launch this week.

A scheme to help thousands of people buy their own home will be launched next week – three months earlier than planned.

The scheme was due to start in January 2014 but the government has announced that people will be able to start applying for the new mortgage guarantee from next week.

Several high street banks will be offering the new Help to Buy mortgages to customers, ranging from 80 to 95 per cent of the property’s value.

The mortgages – backed by the government – will help thousands of people buy new or existing homes up to a maximum value of £600,000.

It is aimed at people who cannot get on the property ladder – or move to a new home – because they cannot afford the large deposit required, often up to 20 per cent.

Under the new mortgage guarantee scheme, the buyer would only need a 5 per cent deposit.
The government and the bank then jointly guarantees up to the next 15 per cent of the property’s value, in return for a fee paid for by the lender.

To be able to offer the guarantees ahead of schedule, the government will be allowing lenders to start writing loans that will become part of the scheme once it opens in January.

Because lenders know that they will be able to purchase a guarantee on these loans when the scheme opens in January, it means that they are able to offer high loan to value mortgages, much sooner.
Only repayment mortgages will be offered under the scheme.

There will be tough checks to make sure buyers can afford their mortgage payments and the borrowers income will be verified.

The scheme will not include interest-only or self-certified mortgages.

The new mortgages will not be available to people with a history of difficulties making debt repayments.

Official statistics show that mortgage lending is around half the level it was before the economic crisis, even though mortgage rates are at their lowest for five years.

Announced by the Chancellor at Budget 2013, the Help to Buy scheme has two parts, equity loan and mortgage guarantee.

Under the equity loan scheme, the government provides a loan of up to 20% of the value of a new build home, interest free for the first five years.

The Help to Buy: mortgage guarantee scheme will be available for three years up to January 2017. Every September the government and the Bank of England Financial Policy Committee will review the impact of the scheme and examine whether the fees or the price cap should be adjusted. If any future government proposed to extend the scheme beyond its three year life the FPC would need to agree.

Link to .gov information here

Armed forces offered interest-free home loans

This week the government announces that is to offer armed forces personnel buying their first homes interest free loans towards a deposit. Read their release (here).

Defence Secretary Philip Hammond announced that service men and women will be able to borrow an interest free amount of up to 50% of their salary to a limit of £25,000.

The loan is repayable over 10 years and is designed to address the low rate of home ownership among the forces.

The scheme will start on 1 April 2014 and covers a three-year period.

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It comes a day after Chancellor George Osborne asked the Bank of England to take bigger role in ensuring the government’s Help to Buy scheme does not fuel a property boom.

‘Set down roots’
Armed forces personnel have lower levels of home ownership than the general population and those who leave often cite the desire to own a home as one of the key reasons why they leave, the Ministry of Defence (MoD) said.

And the MoD said armed forces staff often experience difficulty getting credit because of frequent moves and deployments.

Mr Hammond said of the £200m scheme in a statement: “Service personnel can struggle to enter the housing market as they move around throughout their military career. By giving our troops this extra help they will be more able to set down roots and get onto the property ladder.

“The introduction of this new scheme will help increase home ownership, and provide our armed forces with sustainable lifestyle choices.

“It further demonstrates the government’s commitment to strengthen the Armed Forces Covenant, ensuring that personnel and their families are not disadvantaged by their service.”

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