(Clydesdale & Yorkshire Banks Excepted)
Having done the sums for the month of June, the Council of Mortgage Lenders (CML) was able to release their healthiest figures of the year. Gross lending, which includes remortgaging, rose to £15.1bn. That was 15% more than the previous month and 7% more than 12 months ago. But the rise was put down to merely a seasonal trend, rather than a general improvement in the market.
Commenting on the latest data, CML economist, Paul Samter, said: “There are signs of house prices stabilising and more properties coming onto the market following the abolition of home information packs. This may improve liquidity but transaction levels are subdued and likely to remain so while access to credit remains constrained.”
Indications from other sources, such as the Bank of England, indicate that mortgage lending will fall during the remainder of the year. In its latest edition of ‘Trends in Lending’, the bank warns that the supply of mortgage funds for the public could fall over the coming months. It said that lenders fear that they will not be able to raise the capital they need from borrowing off each other in the financial wholesale markets.
The house price indices of the big two mortgage lenders, Nationwide and Halifax, also show that house prices have been levelling off after an extended period of rises during the earlier part of the year. Drastic policies by the new Coalition Government to balance the books, such as public sector cuts and rising taxation will also inevitably take their toll.
Clydesdale and Yorkshire Bank Customers Face Increased Mortgage Payments
In a bizarre twist of the recent sorry banking saga, Clydesdale and Yorkshire bank have announced this week that thousands of their customers will face an increase in their monthly mortgage payments due to banking error. Around 18,000 customers on variable and tracker rate loans are being informed that they must raise their payment from anywhere between £25 to hundreds of pounds.
The banks are both owned by National Australia Bank, which said that the error has been “exacerbated” by last year’s unprecedented fall in interest rates. Affected customers face a shortfall on their accounts because the banks have miscalculated the capital repayments. Steve Reid, retail director for Clydesdale Bank stated: “We would like to reassure mortgage customers that they need take no action unless they have received a letter from us. The vast majority of our customers are not affected.”
Although the banks have apologised for the error, they have of course, stopped short of accepting responsibility. Already there have been indications from complaining customers of the banks trying to shift the blame. One customer said that the bank’s reply had been very “patronising” and that they effectively tried to put the blame on her. What will the Financial Ombudsman make of all this? It must be strongly suggested that all affected Clydesdale and Yorkshire customers should drop them a line; after all, they have the power to uphold your complaint.