Marsh and Parsons, based in London, have said that they have seen a drop off in the number of first time buyers purchasing property and applying for loans and they blame rising house prices for pushing up the affordability of property and a home owner loan.

At the beginning of last year, the estate agent said that 17 per cent of all its customers were first time buyers, but by January this year, that figure had dropped to just 10 per cent and in February, the figure had fallen even further.

Whilst estate agents in other parts of the country have experienced a similar situation with regard to first time buyers, largely due to the end of the stamp duty holiday in December last year, this does not apply to the same degree in the London area, as the vast majority of properties are well above the stamp duty threshold of even £175,000.

Between the start of 2008 and April 2009, the average London property fell in value by around 30 per cent, making a home owner loan for first time buyers more affordable in this area, but with prices rising by around 13 per cent over the course of the past twelve months, many are simply unable to afford the monthly loan repayments.

Peter Rollings of Marsh and Parsons said “Central London may not be typical first time buyer territory, but it’s little wonder why. Mortgage lenders now typically require a 25 per cent deposit from first time buyers, meaning they would need to put down over £84,000 to purchase the average London property, realistic for only the tiny minority with substantial parental assistance.”

The whole of market home owner loan sourcing systems for financial advisers and loan brokers have reported that there has been an increase of 10 per cent in the number of home owner loan products available to potential borrowers, over the course of the past month alone.

The number of available loan products increased from 4,535 to 5,047 by the start of March. The number of products available to advisers and intermediaries increased by 11 per cent, compared with an increase of just 8 per cent for direct from lender loan products.

The figures from Trigold also showed that the number of home owner loans being sourced by intermediaries and loan brokers also increased dramatically, with around 10,000 more loans being sourced for clients in February, than there were during the previous month.

At the same time, the average monthly loan repayment amount has also increased slightly, partly due to higher interest rates on high loan to value products, but also due to individuals applying for a larger loan amount, as confidence slowly returns to the housing and home owner loan markets.

David Aylmer at Trigold commented on the figures, he said “There are currently 3,510 intermediary products on the market, compared to 1,538 direct showing that when it comes to choice intermediaries still have the edge.”

“Even though we are seeing mortgage payments rise, the fact that this is based on larger advances does show a greater degree of confidence in the market. Add to this the fact that we saw nearly 10,000 more sources in February than January and I think we have reason to be cautiously optimistic for business levels in the second quarter.”

New research from Post Office Mortgages has shown that somewhere in the region of 3 million borrowers in the UK have no idea about what rate they are currently paying on their home owner loan or mortgage.

The research found that around 35 per cent of people with a home owner loan are currently on their lenders standard variable rate loan deal, in the assumption that this will be the cheapest loan option for them in the current economic climate and although this may be the case, around one third of these borrowers do not know what rate they are actually paying.

Almost half of those individuals with a standard variable rate home owner loan are aware that they are able to make overpayments on their loan and reduce the balance whilst interest rates are low, yet the majority of these people are not taking advantage of this situation.

Over the course of the past few months, several lenders have increased the standard variable rate on their home owner loan and mortgage products, pushing up repayment levels for many standard rate borrowers.

With the prospect of interest rate rises from the Bank of England on the horizon and a growing number of cheap loan deals entering the market, particularly for remortgage cases, if you are one of the three million people who don’t know what they are paying on their loan at the moment, it could well be in your interests to check the rate and compare it with some of the new deals available on the market.

As the UK is now slowly starting to leave recession behind and we are starting to see the first glimmers of economic growth in the country, the Government and the Financial Services Authority (FSA) are looking at ways of tightening up on the regulation of banks, in order to stop a similar situation happening again in the future.

As part of the proposed regulation, banks would have much stricter and tighter requirements placed on them for capital adequacy and liquidity, which means they would be forced to hold more cash in reserve.

In addition to this, regulation could place a ban on certain types of loan, such as self certification loans, as well as restricting lending criteria for potential borrowers through much tighter affordability assessments and possible limits placed on loan to value ratios and income to loan ratios.

Although this course of action will protect borrowers from over stretching themselves in the future, there are many concerns that new regulation could actually stop banks from offering loans to many individuals who would currently qualify for one.

Earlier this week, Lord Mandelson said in a speech, that if regulation on the banking sector became too strict, it could prevent potential borrowers from getting the loans they required and this in turn could be detrimental to the economic recovery of the country and potentially push the UK back into recession.

Angela Knight of the British Banking Association (BBA) welcomed the comments from Lord Mandelson, saying  that banks were already taking action themselves to offer loans responsibly and further regulation should be approached with care and not be too restricting.

The research, which was carried out on behalf of Friends Provident, found that around 24 million individuals had no form of protection policy in place and the vast majority of those who did have cover, had a significant shortfall on the amount of cover they actually needed.

Many people take out some type of insurance for their home owner loan, or a payment protection plan for their other debts, such as their personal loans and credit cards, but in many cases this cover is inadequate or insufficient.

Due to the increased cost of borrowing, a growing number of people do not even have protection cover for their outstanding loans and other debts, claiming that they can not afford the premiums. The question should be, can I afford not to have protection cover on my loans?

Of those people who had taken out cover, whether this was for loan protection of family cover, 53 per cent only knew that they had cover, but had no idea about how much benefit they would actually receive or if this was a lump sum or income cover and how long would this last for.

Ed Stuart-Brown at Friends Provident said “It’s a sad fact of life that the unthinkable can and does happen and the last thing you would want is to leave yourself or your family in dire financial straits. I would also urge those who do have cover to dig out their policies and review their level of cover to ensure they have made adequate provisions should the unexpected happen. Unfortunately it’s too late to do anything about it once illness, accident or death occurs. If you are fit and well now is the time to act, the cost for most people is a fraction of the potential benefits they could receive and it’s a simple matter to review your needs with your adviser.”

It is hardly surprising then, that first time buyers made up the highest proportion of individuals who sought professional advice during last year, when looking for a new home owner loan or mortgage.

According to the latest figures from Unbiased.co.uk, which helps people get in touch with an independent financial adviser, over the course of the whole of last year in excess of 70,000 potential borrowers took advice before choosing their home owner loan.

Of these enquiries, somewhere in the region of 40 per cent of all those seeking advice on a home owner loan, related to enquiries from first time buyers.

Remortgage loans were the second most popular request, at 32 per cent, followed by residential loans at 21 per cent, buy to let loans at 12 per cent and bad credit loans at 7 per cent.

Unbiased.co.uk say that they saw a particularly sharp increase in enquiries for loan advice in the first nine months of last year, due to the lack of available mortgage and home owner loan deals in the market place.

Karen Barrett of Unbiased.co.uk said “It is encouraging to see that when there is turbulence in the housing market, consumers are seeking advice from the experts. However, it is essential consumers continue to seek advice regardless of the state of the property market, to ensure they are making the best decisions for their individual circumstances.”

CIFAS, the UK’s fraud prevention service, has just released a 48 page report which has shown that the number of fraudulent loan applications has increased by around 10 per cent in the last twelve months, above the figure for 2008.

According to the figures, there has been a steady reduction in the number of fraud cases relating to loan applications over the past few years, largely due to the declining housing and hoe owner loan market, but as we start to see some signs of recovery and improvement in this sector, so the incidence of fraud cases is also increasing.

Application fraud, where someone knowingly includes false information on their application in order to obtain a loan, such as declaring an inflated income level or not mentioning other existing loans, has actually decreased by around 25 per cent over the past two years .

However, there has been a significant increase in identity fraud, where someone has used another person’s details, or completely fictitious details, in order to try and apply for a new loan and the CIFAS report says that this area of fraud has increased by around 32 per cent in the last twelve months.

Peter Hurst of CIFAS commented on the reports findings, he said “At a time when every responsible member of society feels the strain of current economic conditions, the findings presented in Fraudscape not only reveal the true nature of the frauds identified, but also reveal many of the problems and challenges ahead. This, however, is only the tip of the iceberg. Over and above the frauds recorded by CIFAS members, there is an additional and unquantifiable volume of  fraud that, due to tighter lending criteria, never got as far as the fraud department.”

Despite this drop in loan applications, there were more home owner loan products on the market by the end of January this year, than at any tome in the previous twelve months, according to the latest figures from Moneyfacts.co.uk.

Although there were only 35,000 new home owner loan applications made throughout the month of January, the total number of available loan products from lenders increased to 2,019 and although this is still only a small fraction of the number of loan deals available a few years ago, there is now a wider choice for potential borrowers than they have had for the past twelve months.

What is even better news, particularly for first time buyers, is that many of the new deals being introduced by lenders are starting to relax their lending criteria slightly and offer higher loan to values ratios on their products. There are now a much higher proportion of loan deals which offer up to 90 per cent loan to value.

Darren Cook at Moneyfacts.co.uk said “There is an indication that competition within the mortgage market is getting stronger and more products are being made available to customers with small deposits, but these are still priced at a premium.”

“With product numbers on the increase, the question of quantity over quality arises. But this mortgage market dictates and history shows us that with quantity comes quality and open competition on interest rates.” 

The consumer website, which helps to put individuals in touch with independent advisers for home owner loans and other financial matters, has declared that the 20th of February this year should be known as “Debt freedom day.”

Debt freedom day has been calculated as the point in the year when an average person with loans would have cleared all their debt commitment for the year, if they had used every penny of their salary to repay their loans from the beginning of the year. To put it another way, 13.7 per cent of an individual’s earnings are going towards repaying personal loans and other debts.

Despite the fact that many banks, building societies and other loan companies have been particularly reluctant to offer loans to anyone over the course of the last couple of years and also that many people in the UK are concentrating on repaying as much of their personal debt on loans and credit cards as they possibly can, the average debt level amongst individuals in the UK is still increasing, as individuals continue to take out new personal loans and use their credit cards to supplement their salaries.

The Consumer Credit Counselling Service (CCCS) has commented that this news shows just why individuals should not become complacent about their loans and other debts and should manage their debt repayment more actively.

Karen Barrett of Unbiased.co.uk commented on the figures, she said “Debts can quickly mount up to a considerable sum and this rate demonstrates that debt is something that we need to take control of and actively manage.”

A number of large high street banks have been partially privatised by huge loans from the Government in order to bail them out, yet despite this, many of them are still unable to offer competitive cheap loans to individuals and small businesses who need funding.

But recently, banks have started to declare large profits once again and although they may be unable to offer loans to those people who need them, many are able to pay large bonuses to many of their high ranking officials, which has caused a large amount of anger amongst the general public.

In an attempt to calm public feeling and to show some humility, the Chief Executive of the Royal Bank of Scotland (RBS), Stephen Hester, has announced that he intends to give up his bonus for last year, which is worth around £1.6 million.

This follows a move from bosses at Barclays Bank, who announced last week that they would give up their latest bonus payments. This now places pressure on other chief executives of banks to make a similar gesture in the interests of good will towards bank customers and the public.

70 per cent of RBS is currently owned by the government through loans granted in order to bail the bank out and although Mr Hester is giving up his £1.6 million bonus, his earnings will still be in excess of £8 million for the year.