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Written by rosalind renshaw

Half the population is worried about mortgage rates, and a quarter (26%) of mortgage borrowers fear repossession.

The findings, published in the Which? Quarterly Consumer Report, reveal a fragile housing market.

It says there is an increasing gap between older, more financially secure home owners and the next two generations down: those aged 30-49 who bought their homes recently, and those who cannot get on the housing ladder at all.

A large number of 30 to 49-year-olds are mortgage prisoners, trapped in their current mortgage deal and unable to switch when rates increase. This group also has the greatest housing related costs, spending on average £186 a week compared with the national average of £135.

The report also says home ownership is increasingly out of reach for first-time buyers as rising rents make it harder for people to save for large deposits.

More than half (54%) of people under 30 who do not own a home are worried about getting on to the property ladder.

One concern for both new buyers and remortgagors is that lenders have increased mortgage arrangement fees, which rose by around 60% in 18 months to an average of £1,472 in August. Another concern for existing mortgage borrowers is a rise in Standard Variable Rates, even though Bank of England base rates have been unchanged for over three years.

More than 1.6 householders have been hit with SVR rises.

Which? is now calling for the Government to get tough with banks on its Funding for Lending scheme.

Which? says the Government should ensure that lenders benefiting from the scheme set lower borrowing costs to help everyone, including mortgage prisoners and first-time buyers.

Richard Lloyd, Which? executive director, said: “The housing market is failing not just one but two generations of consumers, with many mortgage prisoners trapped on their current deal and young people excluded from the housing market altogether.

“The Chancellor must put tougher obligations on banks that get cheap finance through the Government's Funding for Lending scheme so that more is done to help those who are struggling through no fault of their own, and especially to ensure that mortgage prisoners and first-time buyers can benefit from lower borrowing costs.”

Which? is also calling on the Government to publish its expectations of the Funding for Lending scheme. Which? says banks must publish details of their mortgage lending under the scheme, and must stop hiking their arrangement fees.

Comments

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    "More than 1.6 householders have been hit with SVR rises"

    Who is this poor unfortunate soul?

    • 25 October 2012 12:37 PM
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    Banks have very little capital so they can try and improve this by increasing rates and fees to borrowers or from everyone via more bailouts. Which do you prefer?

    Also banks are required to lend to businesses and individuals, which should be the priority given they have limited liquidity?

    • 24 October 2012 12:30 PM
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    Ahhhh yes... when will the scrutinising eye of the public and all these "protect the poor tenant" organisations (like shelter) turn to banks to harass them for ripping off consumers to line their own pockets.

    Back in the day (2007) you could get a 5.5% mortgage with a £299 admin fee. Bearing in mind the base rate was 5% that meant a markup of 0.5% for the banks. In 2012 the base rate is 0.5% and the banks are still charging 5-6%. A markup of 5%, 10 TIMES what they were making 5 years ago. Along with the now extortionate admin fees of over £1000 as mentioned above. Market has slowed down, yes. Transactions are down, yes. But not by 10 times!

    Banks are run by criminals, bankers now rate lower than estate agents, parking wardens, wedding venue salespeople and babybuggy salespeople.

    Con artists the lot of them.

    • 24 October 2012 11:49 AM
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    We recently added a mortgage tool on our site so customers could search for fees free deals specifically; its great for first time buyers who need as much of a deposit as possible and at the point they come to our broker (because we don't provide them the lender) they know the product they want.

    ...this isn't mortgage advice and your property could be reposessed if the government ever put the interest rate up.

    • 24 October 2012 09:50 AM
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    Ronseal

    • 24 October 2012 09:46 AM
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    These arrangement fees are a way of advertising a low APR.

    I have never paid an arrangement fee in my life for a mortgage - I've never felt the need.

    When you add the initial "arrangement fee" to the interest charged on a monthly basis for the loan over the fixed rate period, you can see the Annual Equivalent Rate which adds this figure in automatically is sometimes double the advertised APR.

    The problem is that we are all suckers for a deal!

    And as sales & marketing people, we are exactly the type of people that come up with these crappy sales ideas to sucker in the poor unsuspecting public.

    I am very much in favour of "Cuprinol" advertising - it does exactly what it says on the tin.

    Any deal that needs fine print or small print that cannot be fitted in the body of the advert is NOT a deal!

    • 24 October 2012 09:36 AM
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    "..........mortgage arrangement fees, which rose by around 60% in 18 months to an average of £1,472 in August....."

    Just what is this 'arrangement fee' for - Admin?
    Letting agents are coming under fire for charging a reasonable admin fee, so why can the banks charge what seems to be an exortionate rate without serious query?.

    • 24 October 2012 09:13 AM
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