Housing affordability stretched as property price inflation outstrips earnings

27th June 2022 Consumer Lending | #houses

The impact of surging property prices throughout the pandemic has reduced housing affordability to the lowest level on record, according to new research by Halifax. The analysis – based on data from the Halifax House Price Index – compared typical house prices to average earnings across the UK. In the first quarter of 2022, the…

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FPC confirms mortgage affordability test withdrawal

The Financial Policy Committee (FPC) has confirmed that it will withdraw its affordability test Recommendation. The change will come into effect from 1st August 2022. Introduced in 2014 the test specifies a stress interest rate for lenders when assessing prospective borrowers’ ability to repay a mortgage. The other Recommendation, the loan to income (LTI) ‘flow…

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Consumer finance new business grew by 21% in April

21st June 2022 Consumer Lending |

New figures released by the Finance & Leasing Association (FLA) show that consumer finance new business grew by 21% in April 2022 compared with the same month in 2021. In the first four months of 2022, new business was 30% higher than in the same period in 2021. The credit card and personal loan sectors…

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Rent rises will outgrow house prices over the next five years

10th June 2022 Consumer Lending | #houses

Over the next five years rents are expected to grow faster than house prices (5% for rents and 4% for prices) according to research from the Royal Institution of Chartered Surveyors (RICS). The research showed that demand from prospective house buyers fell in May 2022, a potential side effect of the rising cost of living…

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One in seven consumers say lending experience is a decade behind online banking

9th June 2022 Consumer Lending | #loans

New research by Marqeta has indicated that many consumers are frustrated with lending experience and want less jargon and more clarity, with 80% believing that lenders try to obscure the final cost of a loan. The findings part of Marqeta’s new report “Seeking out the alternatives: how consumers are engaging with the lending 3.0 landscape”…

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Credit card spending and personal loan borrowing increases

Credit card spending and personal loan borrowing both increased in the first quarter of 2022, returning to pre-Covid trends as the last restrictions were ended according to new analysis by UK Finance. Total credit card spending was £50.4 billion, with March seeing the second highest spending since the pandemic. There was a significant increase in…

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Over one in ten households are spending money to make properties more energy efficient

31st May 2022 Consumer Lending |

A new study by Experian has found that the cost of living crisis is significantly impacting people’s home improvement plans. The research found the majority of UK homeowners (67%), are planning a renovation in 2022. Average planned spend is £6,959, with around 50% intending to spend £2,500 or less. Just one in ten (9%) are…

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Credit card borrowing increasing at fastest rate in 17 years

31st May 2022 Consumer Lending | #credit

Latest Bank of England data has indicated that credit card borrowing is rising at its fastest annual rate in 17 years. The annual growth rate for credit card borrowing hit 11.6% in April – the highest figure since November 2005. The figures also reveal that the rate for all consumer credit increased to 5.7% in…

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Mortgage lending buoyant in first three months of the year

New figures from the Building Societies Association (BSA) have indicated that mortgage lending by building societies in the first three months of this year was on a par with lending in the same period last year when the Stamp Duty holiday was in operation. Both lending and approvals were higher in January-March 2022 than they…

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Interest only mortgage stock falls by 15%

25th May 2022 Consumer Lending | #mortgages

New research by UK Finance has found that the stock of outstanding interest-only mortgages fell by 15 per cent in 2021, compared with the position at the end of 2020. The concerted industry strategy to manage down the size and risk profile of the interest-only book has seen it reduce by over two thirds since…

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Consumer finance new business grows by 19%

New figures released today by the Finance & Leasing Association (FLA) show that consumer finance new business grew by 19% in March 2022 compared with the same month in 2021. In Q1 2022 overall, new business was 34% higher than in the same quarter in 2021. The credit card and personal loan sectors together reported…

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FPC proposes withdrawal of mortgage affordability recommendation

13th May 2022 Consumer Lending |

The Financial Policy Committee (FPC) has announced a proposal to withdraw its mortgage affordability recommendation. The current requirement requires mortgage lenders to assess affordability by applying an interest rate stress test to determine whether borrowers could still afford their mortgage payments if their mortgage rate were to increase by three per cent. In a statement,…

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Warning over cost of borrowing as overdraft rates surge to record highs

10th May 2022 Consumer Lending | #credit risk

Data covering quoted household interest rates on consumer credit products released by the Bank of England has revealed the rising cost of borrowing for UK households according to analysis by Freedom Finance. With the Bank hiking interest rates by 0.25% last Thursday and inflation expected to show a climb yet again for April, the data…

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