Category: Finance

So, first of all, let’s all settle down, grab a cup of coffee (perhaps a biscuit as well) and look clearly at what is happening in the mortgage market. Rates are rising, house prices are slowing down, and it’s all changing so quickly. All these things are true but putting them into context is often difficult. So here are a few thoughts that may help bring a little perspective to things.

Mortgages make good headlines

The media really don’t help with perspective sometimes. In fairness to them, it’s unlikely that this is due to some sort of wild desire to cause panic or because of a secret conspiracy to promote chaos. The bottom line is mortgages are news and people need to be informed about the general situation. Just remember that they are also trying to sell papers or get viewers, so a little drama helps with that. Things are rarely as bad as they seem, and this situation is no different. Yes, rates are rising, and yes house prices are not increasing the way they were. However, what matters is what that means to you, so you need to read past the headlines a little to get a balanced view. The Navy Seals have a saying, ‘calm is contagious’ which is very appropriate here. Honestly, things are not as bad as they seem.

The mortgage market bounces up and down all the time

The rate that underpins mortgage offers changes regularly. In recent years that change has been slow and steady. Most importantly, it has also consisted of small, almost unnoticeable changes to the base rate. It bounces all the time. The difference now is that the bounce is bigger and more noticeable because it is working in a faster cycle, and the changes in rates have been higher. This creates a feeling of a rapid rise in mortgage costs. There are a few things to put in the mix, though.

• The cycle of change for mortgages is complex

Essentially what happens is the lenders create a pot of money to use for new mortgages. The rates at that point are used to create deals that are then offered to the public to allow them to access that pot of money. The pot and deals are emptying and being changed faster at the moment. That is why things seem to be suddenly changing overnight. They aren’t, we are just all used to a longer cycle.

• Interest rates are still lower than in the past

Again, here it feels as if the rates are relatively higher because the Bank of England has been holding them at a very low level for so long. In the past, we have seen interest rates much higher than this, and the housing market has continued.

• The deals are still there

Let’s remind ourselves of one important thing. The reason mortgage companies lend money is to make money from the loan. They are not going to stop lending money; they will just be influenced by the current market in how they do it. Talk to us; let’s see what is around. Someone somewhere probably has the right deal for you.

Things are nowhere near as difficult as the headlines and the worst of the doom-mongers would have you believe. Remember, mortgage brokers deal with fluctuations and changes all the time, you just don’t usually see it happening.

What does it all mean to you?

So, what should you do if you are looking at mortgage changes in the current climate? First of all, let’s go back to the message that calm is contagious. Sit down with a broker and calmly assess your options. We know the market and we know how it works, so I think it is fair to say we are a better source of information than the tabloids or social media.

• Current offers are not likely to be withdrawn. If you application is advanced enough that you have had an offer from a lender it is very unlikely that it will be taken away from you.
• Don’t sit and wait for changes because they may not come, or they may make things worse. It’s a real gamble to base a decision on ‘what could be next’ rather than ‘what is real now’. The current rate is certain; what it will be next week is not. The current deals are available now and may not be tomorrow. Of course, there is a chance that the rate may drop, but that is always the case.
• If you are remortgaging, then the principle of looking for the right deal hasn’t changed. You are still looking to improve your situation and get a better option.
• Rates are still rather low. At the time of writing the current interest rate is at 2.25% and variable mortgage rate is 4.25%. Again, let’s get some perspective on the reality of this. In 2007 that was around 5.5% and 7.59%. I think that says it all.

In the final analysis, the rates are still relatively low, there are still deals to be had, the money for mortgages is still there, and the housing market is still viable.

We have been doing this for a long time, call us and let’s look at what works for you. If it turns out now is not the right time to buy, move, or re-mortgage, we will soon find out, but if it is, then we can help you through all the noise to the right choice.

Once you have made the decision to go investigate a remortgage, your next step should be to make sure you fully understand what will happen and what you need to do. Just to recap, a remortgage is worth considering if, for example, you:

• Want to release equity in your home
• Your current fixed rate deal is finishing
• You want to switch to a better deal
• Your circumstances have changed

Remortgaging is not for everyone though, so make sure you understand if it is right for your circumstances. You’ll find another useful blog on our website that will help you determine this.

First steps to remortgaging – know where you stand

Before you go any further it’s vital that you know what the new mortgage will mean in relation to your current situation. There are a few things to be 100% certain about.

• Set a date

You can change it later if needs be, but for now, decide on a fixed date to change your mortgage. This is so you can have a milestone point for information – see the next point for a good example of why. If you are on a deal this is ending or similar, then the day after it ends is a good starting point.

• How much do you owe your current lender (if anything)

Sometimes people are not fully aware of the outstanding amount on their mortgage. This is perfectly understandable. Your mortgage is one of those bills that just sort of fades into habit. If you contact your mortgage provider, they will be able to give you an exact figure for the outstanding amount. Ask them for the amount on the specific date you decided. That way you know exactly what the cost will be.

• Get a grip on charges and fees

There will probably be some fees for moving your mortgage. Again, ask for the exact amount from your provider. Usually, there will be either one or both of:

• Early Repayment charge – If there is one, what it will be on your change date?
  • Exit/Admin fees – there will almost certainly be a charge for releasing the deeds. These vary quite considerably and can be hundreds of pounds

One of the mistakes people sometimes make is not fully understanding these points and then finding that, when they come to look at the remortgage, there is not quite as much money as they thought.

Remortgaging next step – Know where you will be

After looking at the points above you should be in a position to be able to make a decision to go ahead. Now you need to know where you will be financially after the change.

• Call us.

All the following will be reliant on you knowing what is available so, to really get a good view of your options, you need an expert to help you.

• Find the best deal.

There is a good chance you will have multiple options, but not all deals are the same. Small details about charges and fees need to be part of your decisions. The devil, as always, will be in the detail so really get to know what is on offer.

• Understand the numbers in context.

Once you know what is on offer make sure you fully understand:

• What the monthly commitment will be for the term of the mortgage
  • What you will potentially gain financially
  • What will happen if your circumstances change

Once you are confident with these you can go to step three.

Remortgaging the penultimate step – get your finances in order

A remortgage is just like a mortgage in that you need to be able to demonstrate you can afford it and that you are a trustworthy, and creditworthy, applicant so:

• Check your credit record with one of the credit score companies.

These are useful for seeing where you stand with your credit at the moment. Hopefully, you will come up with a good score already but if not, now is the time to sort that out.

• Fix any financial areas that need sprucing up.

There are some things that reflect badly on your application. Clearing them up now will not only boost your chances of a mortgage, but it is also generally good advice to improve them.

• Reduce your borrowing if you have any
  • Start to pay your credit cards in full every month
  • Clean up any address and ask for any old associations (such as ex-partners or housemates) to be removed if needed.
  • Do not take any payday or similar loans

• Gather your evidence

You will need payslips to prove your employment status. You need to also make sure you are on the electoral roll and have bank statements.

• Talk things through with us

We will help you with the right paperwork and application process. If you are self-employed or a company director, for example, we need to look at the best options for you. As a rule, using a specialist will make your application more likely to succeed.

While this list looks a lot, in fact, it can all happen very quickly, and you could find yourself with the remortgage solution you need in a short space of time.

As always, we are here to help so let’s chat.

Firstly, I want to say how much I sympathise with everyone looking to get on the property ladder. It’s not easy, in fact, there are so many obstacles and barriers that it can feel impossible. I wish there was a magic wand to wave that would get you the deposit you need and into that first time buyer club, but sadly there isn’t. The best I can do is tell you that I have been privileged to help many people to get that first mortgage and we will do all we can to find you a mortgage when you are ready. Perhaps one other thing I can do is pass on some of the tips that were given to me by successful first-time buyers. So here are 5 of the best ones.

1. Have you thought about shared ownership?

Shared ownership schemes are offered by many developers and because of the reduced cost they reduce your initial deposit considerably. With a shared ownership scheme you will usually pay a mixture of a mortgage for your part of the home and rent to the other owner. Shared ownership mortgages are available, and we can advise you on the best deal. Most importantly though, with a lower deposit you may be able to reduce the initial cost.

2. Is it possible to cut back on spending or declutter?

Sorry, I apologise if you are already doing it but it’s always worth another look. The trade off between a little hardship now and getting your deposit together is not an easy one to accept but you would be surprised how quickly small amounts add up to a bigger sum. Buying a home is a long term investment and all the sacrifice now will pay off in the future. Decluttering and downsizing can really be a surprising boost to your savings. Selling off all those bits of things that you can really live without can make a fair amount of cash. Downsize the car. Rent a smaller place. Take a shorter, less expensive holiday. They feel like sacrifices but honestly, you are only really delaying the holidays and once you are in your own place you can buy replacements over time.

3. Could you lower your sights a little?

I don’t want to discourage you from your dream home, more suggest it may be worth a little delay. Many first time buyers find that they can reduce the deposit required by looking at houses that need a little work or are not in quite the right area they initially wanted. Consider a flat rather than a house maybe? Getting on the ladder in a temporary home may be the doorway to one more suited to your long term needs.

4. Avoid the road to Hell…

I mean the one that is paved with good intentions. If you find you are tempted to dip into your savings set up direct debits that go out on payday and avoid any way of saving that allows instant access. We all mean well and then we chip away bit by bit at our savings. Usually though we do it on impulse so if you take away the opportunity it will make life easier.

5. Make a detailed plan rather than general goals.

If there is one tip that always seems to get results it is plan effectively. Get really detailed if you can. It’s important to know what you will need and exactly how to get there. One of the biggest reasons for doing this is the comfort of seeing the milestones being passed and knowing that you are getting closer to your goal.

I hope some of these tips are useful and that they perhaps help you on the way to your first home. When you need to know where you stand we will be here to advise you. Call us and let’s see how we can help.

A new year is a great time to take stock and review things. There is never a bad time to make sure all your financials are in order when it comes to your home but, as the calendar ticks over into 2022, it will be a particularly good point to do so. 2021 was a bit unsettled to say the least, so any stability you can put in place going into 2022 has got to be a good thing. While everyone has different circumstances there are some key areas to look at where we can all benefit from a bit of a review and some planning for the year.

Insurance/Protection

I suppose with health and wellbeing having been on all our minds so much this year, that would be a good place to start.

• Life insurance: Despite the absolute importance of life insurance, you would be surprised how many people are not aware of what they have and where it is held. Why not take a few minutes to find the details and make sure that you and your next of kin know what insurance you currently have and how to access it if needed? It is also worth checking that the amount covered is still suitable and that all the details are up to date. Don’t forget that you can change your life insurance provider if there is a benefit in doing so.

• Income protection, critical illness, and key person insurance: Nobody likes to think about long term or critical illness happening to us or someone we would need to care for, but you really do need to make sure that you are covered. Self-employed people and business owners should also review their need or provision for key worker insurance. If your business can’t survive without out, neither can your finances.

Next on the list is your personal finances.

• Counter inflation: The trick with rising costs is to make sure you have budgeted for them in advance. A small rise in inflation and the interest rates can have a big impact if you are slow to react. Both these things seem likely which means you could see an increase in things like your mortgage payments, so if you plan and adjust for them now, it will make life easier if they happen.

• Make saving a habit: Get into the habit of saving again or, if you already so save regularly, do a saving health check. Are you saving enough for you goals or any problems that may come up? Try to up your saving levels if you can. Too much in savings is never going to be a problem but too little can be. This is particularly important if you are looking to buy your first home or moving home.

• Reducing debt is like earning more: Reduce your debt as fast as possible (particularly if Christmas ate into your savings or you hit the credit card). The less debt you mustpay every month the better. Not only because of the expenditure but because the interest you pay is lost money.

Homeowners and first-time buyer’s 2022 checklist

Your home is probably the biggest financial decision you will ever make so you really need to keep on top of the finances.

• Homeowners, check your mortgage details: If you already have a mortgage in place refresh your memory on the details. If your fixed term is coming to an end, you really want to make sure that you have a plan of action to either get a better deal in place when it ends or a good understanding of what will change and when.

• If you are thinking of moving, check out government schemes: There’s a general misconception that government schemes are only for first-time buyers. This isn’t correct, sure, many schemes are aimed to get people on the property ladder but there are schemes for people looking to move home as well. Additionally, now there are some great mortgage deals out there, so check what is on offer because you could find that it is well worth considering a move.

• First-time buyers: seriously, check out government schemes – getting on the property ladder might be easier than you think with the help of various schemes that are out there. Additionally, innovative mortgage products like springboard mortgages make it even easier. It may seem like a big hill to climb but it is worth it to get into your own home.

2022 could well be as big a rollercoaster as the last year or it could be stable and a blessed relief from the uncertainty. Either way, a good review in January will prepare you for the year.

As always, we are here to help if you need advice on anything related to mortgage and protection – just give us a call.

Maybe it’s because we have been through so much uncertainty. Perhaps it’s hedging bets. Possibly it’s just because the recent buoyant house market was too good to believe. Whatever the reason, if you listen to some opinions, the end of the stamp duty holiday seems to be the housing apocalypse. The doomsayers seem to be out in force predicting everything from a slump in house prices to market crashes. So, what will it mean, and does it threaten the property space?

For context then let’s just recap a little. The Chancellor put in place a stamp duty holiday during the worst of the pandemic with the intention of stimulating the market – and it did what it was intended to do, perhaps even more than expected as the housing market went into a mini boom. We saw increased prices and a frantic flurry of activity as people took advantage of the savings it offered. Now it is coming to an end and as of September this year things will go (almost) back the way they were. As a result, there is some concern that the market will suffer the yin to the stamp duty holiday boom yang and slump.

Well, let’s get a little perspective, shall we? The housing market may well be subject to the occasional decline and rise but this is all part of the way it works. So, yes, we may see things slow down a little. However, there are still three key factors in play that could go a long way towards balancing things out and keeping the market active for the foreseeable future. Let us have a look at these:

1. 5% DEPOSIT MORTGAGES

To start with, the 5% deposit scheme is still in place which means that anyone looking to move to a home with a price tag of less that £600,000 will be able to take advantage of a much lower initial outlay. The scheme is scheduled to run until December 2022 so not only is it a great opportunity to buy, but it is also likely to keep the market active.

With the 5% scheme in place, first time buyers, home movers and previous homeowners have a lot more choice when it comes to buying a home as their 5% deposit goes much further (subject to affordability) compared to the usual 10% deposit. For example, in theory, a £15,000 deposit at 5% can buy a home in the £300,000 region; the same deposit at 10% will mean a £150,000 home. This is just a hypothetical example, there are other costs involved in buying a more expensive property and mortgage affordability is key, especially as a 95% LTV mortgage will generally come at a higher interest rate. Still, a 5% deposit for many people could mean a bigger home – motivating people to move home.

A smaller deposit requirement also means it is easier and quicker to save the deposit, some may even have just enough saved, which previously at 10% was only half of what was needed. Those looking to move home may realise that they have enough equity to afford a 5% deposit for a more expensive home. This means more buyers are now able to seriously consider a mortgage and take the step to get on or move up the property ladder.

Let us also remember that stamp duty does not apply to first-time buyers purchasing a home under £300,000 and a reduced rate applies if purchasing between £300,000 and £500,000. So, for many buyers looking for a first home, the stamp duty holiday had little or no impact, and removing it does not really matter to them – this, combined with the 5% deposit scheme is likely to attract many first-time buyers, and as we know, generally, an active first-time buyer market creates movement upwards.

2. CHANGING LIFESTYLES

Another factor in the equation is the changing needs of the buyers. Since the pandemic, working from home has gone from a perk to standard practice for a lot of workers. As things go back to normal, we see many organisations adapting a fully or partly remote working model, where going into the office every day is no longer required. This means many office workers no longer need to be city based. Rural locations, garden space, outbuildings, spare rooms for office use and proximity to outdoor exercise have therefore suddenly moved higher up the list of desirable features.

Based on all these changes, in the coming years we are likely to see new buyers and home movers who would not have considered moving had it not been for the changes caused by the pandemic. People who were happy with their 2-bed apartment in pre-covid times may be considering buying a 3-bed home with a garden now. Many living in London, to be within commutable distance to their workplace may consider moving outside of the M25 now if their job has become fully or partly remote.

3. LOW INTEREST RATES AND PLENTY OF OPTIONS

With the current base rate at 0.1% it is a great time for borrowers – for the first time in four years we are seeing mortgage deals below 1%. The best deals are as always, targeted at buyers with large deposits, or at homeowners with considerable equity when remortgaging. However, there are now hundreds of incredibly good deals available from a variety of lenders for different segments of the market, including nearly 200 deals for buyers with a 5% deposit via the government scheme.

There has been talk about some lenders being strict and more selective, which may have been somewhat true during the peak of the pandemic. However, as things get back to normal, lending criteria are also getting back to normal. Of course, the standard rules around eligibility and affordability always apply.

Give us a call to explore the best options for you. There are mortgages available and there are options for everyone, so let’s look at what works for you.

When Chancellor Rishi Sunak stood up to deliver his budget earlier this month, he was certainly delivering the most unusual one for many years. Naturally, we were avidly watching closely to see how getting a mortgage and buying a property would be affected by any changes. There was actually rather a lot in there that could impact the mortgage and property world but putting that aside for the moment, it is worth taking a breath to consider how strange the circumstances surrounding this budget actually were. We are coming out of a pandemic, there had been a break with the EU earlier in the pre-budget year, around 20% of the UK is currently on furlough and billions of pounds have already been spent on Covid relief. That is to name but a few of the unusual factors at play. Like him or hate him, you have to wonder how Rishi Sunak even started on a plan to deal with all that. 

However, plan he did, and the result is really going to impact the housing arena in the coming months. In fact, there is so much to be said that we are going to split this over two blogs. In this one, we will look at the general property situation and next month specifically at mortgages. That said, they are of course intimately entwined so it is probably better to consider the two blogs as one bigger discussion. 

So, turning to the general property market then, you have to generally say the budget was pretty good news for buyers. In particular, the question of a price crash because of the recent stamp duty holiday coming to an end was, if not answered, certainly addressed in other ways. The practical upshot was that the stamp duty holiday was extended. This came as no real surprise though because there has been a lot of pressure applied from the housing industry, via a public petition, and from inside Westminster, for the extension to happen. The big fear was that there would be a price crash and the market would stagnate if the holiday ended while we were still recovering from lockdown. There was also the considerable problem that the stamp duty holiday has resulted in a severe backlog of paperwork and processing. It would appear that on this occasion at least, the Exchequer listened. 

The stamp duty holiday for properties up to £500,000 was extended until the end of June. This should keep the property market active over the second quarter whilst also allowing for the processing of property transactions currently bottlenecked in the system – this would be a big relief for many who were concerned about missing the deadline. The other slightly more surprising response was the extension of the stamp duty holiday on homes under £250,000 until the end of September, this will still offer a saving of £2500, not as appealing as the maximum of £15,000 that can be saved until June, but still not bad and should keep the market active. 

Rishi Sunak made a big promise in the budget speech when he reiterated the government’s intention to ‘turn generation rent into generation buy. The budget is intending to support this promise, with the introduction of the 5% mortgage scheme. Under the scheme, applicants with a 5% deposit will have access to 95% loan-to-value mortgages. 

First-time buyers, home movers and previous homeowners buying properties up to £600,000 are eligible. This should keep the market active even after the stamp duty holiday has ended and helped many out of renting and into owning – which is great. 

So, are there any downsides? Well, yes. While overall the budget is optimistic and looks really promising for the property market, it would be wrong not to balance that a little. I suppose you could take a less optimistic view that from September we could see a drop in sales and that there could be a corresponding drop in value. That could result in negative equity for a short time, maybe. This is far from certain though and, to be frank, the concerns of the long term are not really any different than at any other time. There is always something bad possible but, as we all know, buying property is still one of the most secure investments you can make. 

For now, Rishi Sunak has opened up a window to allow new buyers into the market and to allow those currently caught in the chain to complete their move with the stamp holiday in place. Our advice is to act quickly if you want to make the most of the favourable market right now. 

We can help you with all your mortgage and protection needs, get in touch today! 

Getting a mortgage is a major financial commitment so it’s best to gather as much information as possible before you start. However, during the process you may come across some outdated and incorrect information. Below we will look at seven common mortgage ‘myths’ and give our expert verdict on each one.

Myth1: You’ll need a much bigger deposit because of Covid-19

Verdict: Yes, but maybe not! 

Okay, so due to Covid-19 lenders have tightened up their criteria and the loan-to-value percentages have generally gone down, meaning you’ll need a relatively larger deposit in most cases. However, if you’re in the market for a newly built home you can still buy one with a deposit of just 5% via the Help to buy Equity Loan scheme. 

Equity loans are available for newly built homes with a price tag of up to £600,000 – for both first time buyers and home movers. With this scheme the government lends you up to 20% (40% if you’re in London) of the cost of your newly built home. 

So, you put down 5%, the government gives you a loan for 20% and the remaining 75% is your mortgage from a lender. You won’t be charged interest on the 20% government loan for the first five years of owning your home.

Myth 2: You can’t get a mortgage if you have a low credit score

Verdict: Not entirely true.

Contrary to popular belief, a credit score isn’t everything and you can still get a mortgage with a below average score. You can have a low score if you haven’t used much credit in the past, which is not your fault, so as long as you don’t have anything negative on your credit file you should have options available.

Even if you have bad credit history, as in something negative such as a CCJ or missed payments, you may still be able to secure a mortgage, however it’s worth being aware that your options may be limited and the mortgage deals available could have higher rates and fees and may require a larger deposit.

It is best to contact a mortgage broker to discuss the options available to you based on your own personal circumstances.

Myth 3: You are too old to get a mortgage

Verdict: Age is just a number, as long as all the numbers add up!

There is no maximum (or minimum age) to get a mortgage, each lender has their own age limit which typically varies from 70 to 85 years as the mortgage term end age. So, in most cases, age may limit your options but doesn’t mean you’re not eligible. 

For instance, if you’re 50 and you want a term of 30 years, you’ll be limited to lenders who accept 80 years and above as the mortgage term end age. If you are 65 you may find that you can only get a mortgage for a 20-year term with a limited set of lenders. 

Goes without saying, all other criteria (income, affordability, credit history etc.) need to be met.

Myth 4: It’s very difficult to get a mortgage if you are self-employed

Verdict: Well, yes and no.

The basic criteria for approval are the same for everyone: a stable income, affordability and good credit history. However, providing proof of income for self-employed borrowers is generally more burdensome, in terms of the documentation required. That’s why it’s a common misconception that it will be more difficult for self-employed applicants to get a loan than salaried workers.

If you’re self-employed with a stable income, you’ll need a good mortgage adviser and a good accountant, and it should be alright.

Myth 5: Lowest interest rate = cheapest mortgage

Verdict: Not necessarily. 

Do not assume that lowest mortgage rates mean the best value. There are several factors influencing the overall cost of your mortgage. 

1. Type of deal: You could have a tracker mortgage and your rate could increase at any time, while having a fixed-rate mortgage would mean you rate stays the same for a period. 
2. Length of deal period: After the initial deal period, you’ll be put on the lender’s standard variable rate, which is usually much higher. 
3. Fees: These could amount over £1000 and must be taken into consideration when calculating the overall cost.

Myth 6: There’s no point looking into mortgages until you’ve found a property

Verdict: Wrong!

It would be a mistake to put the mortgage process on hold until you’ve found the home you want to buy. Instead you should be proactive and meet with an adviser before you start searching for a property, so you know what your budget should be. Shop around for the property and scope out the mortgage market to see what you can afford. You should also apply for a Decision in Principle (DIP) that lets you get ahead of the game and can make you a more attractive buyer.

Myth 7: You need to wait to apply for a mortgage if you have recently changed your job

Verdict: Probably not.

You can still get a mortgage if you’ve just switched jobs, it is not a deal breaker. Lenders realise that length of employment does not always correlate to stability – to climb up the ladder, one often needs to switch jobs. So, if you have a good career history and have switched jobs in pursuit of a better opportunity that should be fine. However, there may be some exceptions, for instance, if you’ve had a complete career change or if the new job has a long probationary period, or if you’ve just switched to a temporary contract, etc.  

It would be best to speak with a mortgage adviser if you find yourself in such a situation – getting professional advice will ensure that you don’t unnecessarily ignore a career opportunity just because you are about to apply for a mortgage or that you don’t put your move on hold because you started a new job!

Whether you are taking your first steps towards getting a foot on the property ladder or buying a bigger place for your growing family or investing in property, being armed with the right information is essential to your journey. As we demystify the world of mortgages, we would like to offer our services for a free consultation – get in touch with us today!

With the reopening of the housing market about 3 months ago, all eyes are eagerly watching and analysing to see what happens – predictions range from delightfully optimistic to a bit pessimistic (the truth is most likely somewhere in the middle!). 

Without going too much into predictions, the important thing to remember is that buying a home is not always merely a financial transaction. Most people buy homes because they want homes to live in, and no pandemic, lockdown or recession is going to change that! 

On that note, this blog aims to explore five positive facts (yes facts, not predictions) about the current housing market.

FACT 1: Lowest interest rates ever.

The Bank of England has slashed interest rates to a record low of 0.1%. This has resulted in some amazing mortgage deals – to give you an idea, the average two-year fixed rate is now at just over 2 per cent. The current cheapest five-year deal, a 1.34 per cent 60 per cent loan-to-value fix, is the cheapest ever, on record. Basically, it’s a great time to get a mortgage.

FACT 2: Bigger budgets

As you probably know, the Government has announced a Stamp Duty Holiday, which means that until the 31^st of March 2021 buyers will not pay any Stamp Duty on the first £500,000 of a sole residential property. This means buyers can save up to £15,000 on the purchase of their next home. 

In other words, that’s an extra £15,000 that can be put towards the deposit to afford a home that was previously out of reach, creating a window of opportunity that’s leading to a lot of activity in the market.

FACT 3: More activity

Usually during the summer people focus on their holidays, slowing down the housing market. However, with Covid-19, the Stamp Duty Holiday and the record low interest rates, it seems people have turned to buying and selling homes to fill the summer holiday void! 

According to property portal Rightmove, August 2020 has been the busiest month ever for the property market (based on the data they hold) with the highest number of sales agreed in a month having a record total value of over £37 billion. 

This trend is seen even in higher value properties (which makes sense given the Stamp Duty Holiday) with the number of sales (subject to contract) for properties valued over £1m doubled as compared to this time last year.

August has also seen the highest number of new properties coming to market in a month since March 2008.

FACT 4: Faster sales

According to property portal Zoopla, homes are selling at a faster rate than before the pandemic across all regions of the UK.

Since lockdown restrictions were lifted, the average number of days to sell a home (subject to contract) has been 27 days, compared with 39 days over the same timescale last year. That’s almost two weeks less. This trend is evident amongst all types or properties from 1 bed flats to 5 bed houses.

This is great for buyers who are looking to take advantage of the stamp duty holiday.

FACT 5: Mortgage brokers get you better deals

As discussed, the record low Bank of England base rate is resulting in some amazing mortgage deals. There are many lenders in the market, with hundreds of products and each one with a different criterion. It’s complex.

Brokers understand the market really well (that’s their job!) and have access to better deals than what you can find on the high street. A broker can also help you strengthen your mortgage application at this tricky time.

Get in touch with us.

We can help navigate you through the complexities and get you the perfect mortgage for your new home. Get in touch with us today.