The trial version, UK Compare Mortgages, was suspended last year and completely axed this month. The closure follows the shutting down of a US version that ran for 2 years.

A spokesman for Google said that the UK site had ‘not been as successful as we would have hoped.’

The problem with comparison sites for mortgages

The mortgage market does not need another comparison website. Because comparison sites always starting with the lowest rate, they are flawed.  To qualify for the eye-catching deal, applicants usually have to meet 10 to 20 minor hurdles before getting to the stage of worrying about the rate itself.

When looking at comparison sites there is always a tempting and impressive offer, the equivalent of a Rolls Royce or Aston Martin gleaming on the forecourt. But, as with these cars, the standout mortgages are supremely exclusive. They are only available to the very few. It is not until you get to the second or third page in the table that you start to find the products that the bulk of clients require, and for which they are eligible.

Hidden costs

Comparison sites list mortgages by rate. But the rate isn’t the only financial consideration. Fees and redemption penalties are also factors in finding the best product for each individual client.

Most of the comparison sites only take you so far before referring you to an adviser – an adviser who has bid for that business. Why not cut out the hassle and talk straight to an independent financial adviser? Limetree can find you the best mortgage, from the whole market, considering everything, not just the rates.

The FSA found that most sale-and-rent-back products, sometimes called sale and leaseback, were either unaffordable or unsuitable and should never have been sold in the first place. The decision came after a year-long review of 22 firms.

Sale-and-rent-back transactions allow struggling property owners to stay in their own homes, by selling them to a company at a discount price. The company then rents it back to them at market rate.

The most common failings found in the review included poor assessment of appropriateness and affordability, bad ordering and timing of disclosure and inadequate record keeping. The FSA also highlighted incorrect information in the rent-back agreements, financial promotions that broke FSA rules, and badly structured sales processes that did not give customers enough time.

A study by Which? In February last year criticised the advice given to sale-and-rent-back customers as ‘woefully inadequate’.

Not in the interest of the homeowner

As I recently commented in the Financial Adviser, the main problem with sale-and-rent-back is that homeowners’ interests are left far behind. A product that should have helped vulnerable households often ended up stinging them. They should have been treated better by the firms involved, but most sale-and-rent-back companies just sell the properties on to maximise their own interests.

The closure of the markets is a good move in that it will protect desperate households from being affected by a product that is not designed in their interests.

If you need any more information about the closure of sale-and-rent-backs, or advice about what to do in your financial situation, don’t hesitate to call us.

In summary:

• European Central Bank’s liquidity programme has averted a credit crunch. A major positive for European growth.
• The liquidity programme allows Italian and Spanish debt to be funded “through the back door”. The threat of euro break-up is much reduced – positive for equities.
• US economic data have been surprisingly robust and point to an acceleration in growth. Another positive for equities.
• Equity markets are extremely cheap relative to bonds and cheap or fair value in cash flow terms.
• We have moved to a modestly overweight position in equities.

Prospect Wealth Management brings the highest standards of professional investment management to the individual investor, charities and trusts.

London, for the high demand and premium prices? Somewhere in the South East, where buy-to-let activity has always been high?

Well, both of those would be good choices, but neither compare to the leading location, in terms of return on investment.

According to haart, the best place to invest is Peterborough. Haart’s monthly Yield Index reveals that yearly returns on one to three-bedroom properties in Peterborough are the highest in the country. The yield can be as large as 9% per annum, for a two-bedroom apartment.

It’s no surprise then, that the East of England as a whole, including Cambridge, currently offers the best rental yields out of any area in the country, followed by the East Midlands and South Yorkshire. A bit more surprising that London comes fourth, although that’s still high on the list.

It’s not just the recent stats from haart that commend Peterborough to prospective landlords. I can speak from personal experience. I spent five years living in the town, and own two buy-to-let properties there. Want to know how I have found it?

Both my properties have been serviced well. I have never had a void period longer than two weeks, and both rental income and capital value have increased over that period. Also, with the price being a lot lighter, I got a bigger property for my money than I would have in a lot of other places.

So it’s thumbs up from me for Peterborough as a place to buy-to-let. If you want any help getting started as a Landlord – in the East of England or anywhere – don’t hesitate to get in touch.

Now, when you apply for a mortgage, there are even more back office checks being done. For example, the Mortgage Verification Scheme (MVS) kicked in fully this month. Under the MVS, mortgage lenders send details of borrowers to HM Revenue and Customs who crosscheck it against their tax returns.

It is a good thing that a variety of fraud systems, such as the MVS, are in place. Our only worry is that a mortgage lender might be fixated on a self-employed person’s net profit, without understanding their income situation properly.

For example, a client might have a contract go wrong and end up losing £50,000 of her net profit, but this could clearly be a position that will not repeat itself the next year.

As a general rule if you are self-employed it helps to request an SA302 in advance of your mortgage appointment. This is your tax calculation from HMRC.

Individual circumstances are the reason to involve an accountant early on. An accountant may be able to shed some light on your ongoing financial situation where the black and white of a computer system fails.

For more information contact Limetree Financial Services.

Because of the amount of time spent on service overseas, lenders can be dismissive of the needs of the military. One Army member expressed the problem this way:

I recently wanted to remortgage my family home but was frustrated to find that, because I am presently letting it due to service overseas, that most mortgage lenders would only offer buy-to-let products, which incur far inferior terms (rate and LTV).

I argued that it was my main family home and as only my military service compelled me to let it for a short period, I should qualify for residential terms.

Lenders are beginning to get it, however. We have found a number of lenders that allow armed forces personnel who are posted overseas on operational duties to rent out their property, or remortgage it, without change or having to switch to a buy-to-let mortgage.

It is also apparent that these very same lenders also accept deposits via the Long Service Advance of Pay scheme – a long-established MoD scheme under which the government provides a loan for the deposit on a property.

If you are in a similar situation and would like to know which lenders can help you, give Limetree a call.

In summary:

• European Central Bank acts as lender of last resort to European banks, calming bond markets.
• UK Gilt prices hit new highs as UK is seen as one of the few safe havens – for now.
• US economy continues to show signs of improving growth, underpinning global stock market.

Prospect Wealth Management brings the highest standards of professional investment management to the individual investor, charities and trusts.

We wish all our readers a Happy New Year.

Is it all about the London Olympics and Wimbledon in the summer for the feel-good factor?

Or about continued low interest rates? Will the Eurozone stabilise? Will there be a double dip global recession?

Who really knows? At Limetree, whatever the market brings to us in 2012, we are ready, willing and able to achieve the high standards of advice and service we offered last year!

If you are a first-time buyer or mover, or are looking to remortgage, we aim to help as much as we can. Why not start the year by giving us a call?

It was good news for customers on Norwich and Peterborough’s standard variable rate recently. The rate dropped 0.5% to 4.95%, the same standard variable rate as Norwich and Peterborough’s new owner Yorkshire Building Society.

On the other hand, it was bad news for Bank of Scotland and the The Mortgage Business customers. These lenders, both part of the Lloyds banking group, increased their standard variable rates by 0.11% to 4.95%.

Standard variable rates (SVR) differ considerably from lender to lender. They are usually set by the board of directors and can be varied at any time. We find that many of our clients have remained on the standard variable rate as there are usually no redemption penalties, leaving them flexible to have options.

But is it time to change?

Many fixed rate and standard rates are now below standard variable rates. Some lenders are offering no redemption penalties, as well as free valuation and legal services. If the difference between the rates is enough, it might not take long to save money, even taking the arrangement fee into account.

Contact us to see if it is worth changing. And from all of us at Limetree – hope you’re having a happy Christmas!

While first-time buyers are working hard to raise the money up front, lenders are beginning to offer higher proportions of the property value as a loan. The more you can borrow, the less deposit you need.

True, many of these higher LTV mortgages come with restrictions. But the picture is definitely improving. Rates on these products are getting more competitive too.

Woolwich is a good example. It has recently extended its range of fixed-rate mortgages to 90% loan-to-value. This still leaves a buyer needing to find 10% deposit. But if that can be done, the 3-year fixed mortgage comes with a rate of 4.99%. What’s more, there are no fees to set it up.

As for restrictions, Woolwich set a minimum loan amount of £50,000 and a maximum of £500,000.

Products like this are not just important for first-time buyers. We are convinced at Limetree that improving the first-time buyer market is key to getting the whole property market active again. Woolwich’s latest move is a positive one.

I hope that this brings a bit of festive cheer not only to first-time buyers but also to everyone hoping that the mortgage market improves for them. If you need any advice, or to find the best mortgage deal for you, get in touch with Limetree.