Blog Archives

Mortgage market improves

23.08.2013

Mortgage activity has strengthened in 2013, according to the latest report from the British Bankers Association, but high repayments and redemptions mean we are not seeing an increase in net mortgage borrowing on the high street.

Buyers and those remortgaging continue to be attracted by lower rates and easing criteria. Help to Buy is helping first-time buyers and is expected to give a further boost to this group, as well as second steppers, from January when the guarantee element of the scheme is rolled out. Funding for Lending is resulting in ever-lower mortgage rates, while the Bank of England’s comments on forward guidance suggest interest rates are unlikely to rise for a couple of years at least, further instilling confidence.

However, caution continues to prevail as borrowers who can afford to do so continue to overpay on their mortgages, taking advantage of low interest rates and paying down debt where they can. This is sensible: why leave savings languishing in accounts paying poor rates of interest when you can reduce your borrowing? While confidence may be growing in the housing market, there is a reluctance to take on extra borrowing while we still have an uncertain economic and jobs climate.

While lending volumes are improving, we remain some way off a sustained recovery in the housing market as caution continues to prevail and transactions are far lower than they were at the height of the boom years. However, mortgage brokers and estate agents are still reporting a high level of enquiries and we expect these to continue to feed through to improved official figures in coming months. 

Jonathan Harris
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Jonathan Harris

Anderson Harris in the press

12.08.2013

Last Wednesday we issued some comment on the back of a statement from the new governor of the Bank of England. Mark Carney said the Bank of England’s Monetary Policy Committee would keep interest rates at 0.5 per cent until unemployment fell from 7.8 per cent to 7 per cent.

We emailed journalists our thoughts on what this means for mortgage rates. These comments proved popular with journalists and we were delighted when our comments appeared in the Daily Telegraph, the Times, the Sun, the Week, the Guardian, This is Money, and in the weekend Financial Times, Times and Sunday Express. [We apologise in advance for the articles lurking behind paywalls].

It is always gratifying when journalists use our thoughts and call upon our expertise in their articles. If you are a buyer or looking to remortgage, it is also worth getting in touch to find out which is the right mortgage for your circumstances, whether it be from the high street or a private bank.

Adrian Anderson
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Adrian Anderson

Interest rates unlikely to rise until 2016

07.08.2013

The Bank of England Governor Mark Carney today issued his Forward Guidance, suggesting that interest rates are unlikely to rise until unemployment has fallen to a threshold of 7 per cent. While the Bank is not promising to keep interest rates low for a particular period of time, it expects that rates will not rise above their current level of 0.5 per cent before the third quarter of 2016. This is far more certainty than we have ever had and while it brings no comfort to savers, it will reassure overstretched borrowers who are worried about potential rate rises.

We expect fixed- rate mortgages to fall even further on the back of this announcement. They may already be at historic lows but if lenders are to convince borrowers to opt for a fix when interest rates are unlikely to rise, then pricing needs to be attractive. Borrowers who prefer the certainty of a fixed rate and particularly those looking for something beyond the next three years when it is less certain what will happen with interest rates, might wish to consider a five-year fix.

Speak to Anderson Harris if you require more assistance and advice.

 

Jonathan Harris
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Jonathan Harris

One year on: Is Funding for Lending working?

01.08.2013

It is one year since the government launched the Funding for Lending scheme and the question on everyone’s lips is: is it working? Well, we think it is. Undoubtedly, mortgage rates have fallen and are at their cheapest ever levels. There is also increased mortgage availability and crucially, more choice and better rates for first-time buyers.

My fellow director Adrian Anderson is extensively quoted in today’s Guardian discussing the scheme:

Adrian Anderson is a director of the London-based mortgage broker Anderson Harris. He says FLS started to make an impact last autumn and momentum has been growing. “In the last year interest rates, especially fixed rates, have gone down significantly. Twelve months ago you would have paid an average of 4.7% for a five-year fixed-rate mortgages, and now you would pay about 3.7%. Rates on two-year fixed-rates have fallen by a similar amount.

“At the beginning from what we could see most of the FLS money was quite concentrated on mortgages at lower loan-to-values, but the people who are benefiting now are first-time buyers and others who are borrowing at a high LTV. The main change has been price. I think the banks have relaxed their [lending] criteria a little bit, but borrowers are still having to prove their incomes.

“FLS has definitely been a good thing for the mortgage market, for the banks who are lending, for mortgage brokers and for borrowers. I have seen a lot of clients who were on lenders’ standard variable rates decide to remortgage now because rates are so good. Most are choosing five-year fixed-rate loans because they are worried about years three, four and five when rates might have started to rise again.”

Jonathan Harris
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Jonathan Harris