Money Insider: First-time buyers boost for flagging mortgage market


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The Independent Online

A surge in new mortgages to first-time buyers was the only bright spot among the latest official mortgage figures released this week. The Council of Mortgage Lenders (CML) numbers for June were nothing to get excited about, with total lending down 6 per cent on last month at £11.7bn and 7 per cent lower than last June.

It was no surprise when loans to first timers fell sharply in April this year as the stamp duty holiday came to an end, but they have since rebounded and jumped by 9.1 per cent in June where the £2.4bn lent represents the strongest performance for nearly two years.

While this increase is welcomed and a trend lenders and the housing market would like to see continue, it is thought the figures for May could have been distorted by the additional bank holidays for the Diamond Jubilee.

With house prices still edging downwards, and some very competitive rates available to 90 per cent loan-to-value, the conditions for first timers is looking healthier than they have done for some time.

Yorkshire Building Society currently has a two-year fix at 4.84 per cent with £495 fee and First Direct a very attractive 4.99 per cent with no fee fixed for five years, both available with just a 10 per cent deposit. However, the low value of remortgage transactions is responsible for taking the shine off the mortgage figures , down by 18 per cent on the May 2012 figures and by the same amount compared with June last year.

This isn't altogether surprising with the Government's Funding for Lending scheme well underway and most commentators predicting that rates are unlikely to rise in the near future.

A number of banks have cut mortgage rates in recent weeks and it's meant that some borrowers are delaying their remortgage decison, currently sitting tight and holding out for an even better deal.

Use new technology to avoid incurring charges

Anyone who's accidentally slipped into the red on their current account or exceeded their agreed overdraft limit will never forget the £20 or £30 rap on the knuckles from their bank for their financial indiscretion.

With many people leading increasingly busy lives, there are often more pressing matters than checking whether their bank account is in order.

While there have been endless arguments as to whether the level of unauthorised bank charges are justifiable, banks are actually embracing new technology to give customers a better chance of avoiding these fees. Most offer a text alert service which sends a message to your phone showing a weekly mini-statement or when a large debit or credit appears on your account.

Lloyds TSB and Barclays offer this service for free, as part of their mobile-banking applications where you can also set up free text alerts for high balances, low balances and also when you are getting close to your limit.

If you've got a smartphone, you'll find that all the main banks offer a mobile-banking option for your iPhone or BlackBerry. As long as you are already registered for online banking on your PC, you will be able to opt for banking on your phone too.

Barclays, NatWest, Lloyds TSB, First Direct and Santander all offer this service. You can see the last few transactions on your account and make payments and transfers when you're on the move, and there's no charge from the bank for these services.

With your bank account at your fingertips, you can take a look at your balance or a make a transfer during some of your daily "dead" time – maybe in a spare five minutes between meetings or perhaps on the train journey to or from work.

Last year, Lloyds TSB launched its online service, Money Manager, which is aimed at helping online customers take much better control of their money, providing them with a deep level of detail on where their money goes each month by categorising their spending into groups.

It includes online calendar option so you can see at a glance what payments are due to be made over the coming days or weeks – something that should prove a big help for those who often struggle to keep on top of their finances.

Even if you only use the services on the odd occasion, it's worth signing up for – at least it's another way of helping you avoid being hit in the pocket with unwanted bank charges.

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