Official figures out today show in England and Wales that homeowners threatened by repossession rose by a quarter in the year to the end of June.

According to The Ministry of Justice lenders made 28,658 possession orders against borrowers in the second quarter of the year, 24% more than the same time last year.

The numbers show there is an increase in homeowners struggling to pay their bills, 4% higher than the previous quarter.

The possession claim has now reached 39,078 these are claims made before it goes to court.
This is a huge jump to 17% up from the second quarter last year, but has run at the same rate as the first three months of this year, according to the Ministry.

It’s looking likely the repossession claims are going to be higher this year, last year there were 137,591 which was a 15 year high.

These figures do not reflect the number of homes actually repossessed by lenders but shows how many court actions have been started against homeowners.

If you do think you are going to run into financial problems and not be able to keep up your repayments, you should tell your mortgage lender immediately, as they will try and help you as much as they can.

Source: Guardian

It’s looking likely that there will be no more cuts in the interest rate this year, after the International Monetary Fund report was out showing the gloomy outlook for the British economy.

With the rate of inflation continuing to rise, the Bank of England have no means for cutting the cost of borrowing and it seems like it will be like this for a while.

With the Bank of England base rate is currently at 5 percent, the general work in the city is that it will stay the same; we should know the decision later today.

The British Forecast for economic growth has decreased to 1.4% this year and 1.1% next year. It had previously forecast 1.75% growth for each year in the IMF report.

Due to the rise in energy, fuel and food costs, inflation would be higher than the Banks 2% target for a longer period.

Even with the slight decrease in mortgage rates not many homeowners are any better off.

Source: thisismoney

Read more about the UK interest rate here.

The Financial Service Authority (FSA) yesterday fined Liverpool Victoria bank £840,000 for adding protection insurance policies to customer mortgages without explaining to them that it is not compulsory.

It’s been reported that some lenders are just adding the protection policies to the quotes without a word to the customers, so they end up paying for something they did not necessary need, and in some cases when the customer realised that it was not compulsory, they would then put pressure on them to take it out still.

The FSA also said that they were also guilty of not explaining that the policy premiums were added to the customer loans up front, and failed to tell the customer that there would also be interest added to the policy.

It’s said that 14,500 clients were paying for protection policies that they didn’t fully understand due to lack of no information from the bank; each case on average was paying £1,600 for the protection policies.

The FSA said they have already fined seven other firms for misspelling policies.

It this economic climate we do not want to be paying for something we don’t need, if you use a financial adviser or when implying to a mortgage company, make sure there are no additional policies added to your loan, ask to see any insurance policies on a separate quote.

You may wish to take a payment protection out, so you should ask about this and make your decision if it affordable for you. If you get your quote separate you then can have a chance to shop around, as it can sometimes be cheaper to get cover independently from your mortgage provided

Source: Mirror

Read more UK mortgage news here.

More mortgage lenders should come back into the market by the end of the year according to Lloyds TSB, which is good news for all the people who are looking to buy a property.

A lot of banks have taken a back seat with mortgage lending, but the market is now expecting an increase in the number of mortgages approved.

Cheltenham & Gloucester, owned by Lloyds TSB, have increased its share of net new lending by 15 percent, they continued offering mortgages since the beginning of the credit crunch whilst its rivals pulled back lending.

Cheltenham & Gloucester always had sufficient liquidity to keep lending as they never offered high risk mortgages such as 100 percent loan to value mortgages and buy-to-lets.

Although not such great news, the figures out yesterday from the Bank of England showed that total mortgage approvals in the UK are down by two thirds in the year to June.

Source: Telegraph

Read more about UK mortgages here.

Today’s loss brings the group’s total credit crunch impact to £972m, this may seem an awful lot of money to most, but it’s a fraction of the write downs many of the banks rivals have had. The group said that the performance was knocked by the drop in its Scottish Widows business, and the value of investments, the volatility in the stock market impact the group.

Lloyds have hinted that they are not planning a multi-billion pound fundraising move. Like the banking counterparts Barclays, HBOS and Royal Bank of Scotland.

Eric Daniels the chief executive the group said the bank’s capital position was ‘very robust’ and should help the group weathers the market and economic turbulence. Lloyds said its underlying performance reflected good ‘momentum’, with adjusted profits up 11% to £2.16bn, they will also lift its half-year dividend by 2% and said it was confident in its capital strength.

Lloyds posted a 15% rise in underlying profits at its retail banking arm, to £911m. The group grew customer deposits by 10% over the last twelve months, but due to the mortgage lending slowdown it’s continuing to see a cut its mortgage book.

New UK mortgage lending was expected to total around £60bn in 2008, down from £108bn last year, both net figures.

Lloyds announced that they have £655m in bad debt in its UK retail operation which is slightly higher; there is also a 3% increase of mortgage accounts three months or more in arrears over the last year.
The group expect house prices to fall a further 10% to 15% this year and 5% in 2009, and with the £36m impairment charges they have already this could lead to further bad debt.

Lloyds appreciate that is has been a challenging period for all banks, but with a more conservative business model they will withstand the difficulties of the global financial market.

Source: thisismoney.co.uk

Read more UK business news here.