Blog Archives

Arrears and repossessions fall further, say CML

14.05.2015

Repossessions continue to fall, while the number of borrowers in arrears has also declined, according to data out on the first quarter of the year from the Council of Mortgage Lenders. This is not altogether surprising with rock-bottom interest rates and improving employment numbers, as well as lenders prepared to be flexible and show forbearance.

However, there are still thousands of homeowners being repossessed each year, which begs the question: what will happen when interest rates do start to rise? How will people cope? Even though we have had a benign interest rate environment for some years now, there are likely to be people whose finances are teetering on a knife edge and rate rises could easily push them over.

Interest rate rises are inevitable at some point; when they come, they must do so gradually. Thankfully the Bank of England has suggested that this will be the case.

Nevertheless, borrowers must keep their lender in the loop if they are struggling with their mortgage. It is much easier and less stressful to come up with solutions early on than further down the line when the options may be much more limited.

Jonathan Harris
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Jonathan Harris

Election result is the ‘right’ one for property market

08.05.2015

The Conservative victory in the election by a small majority is good news for the housing market. Uncertainty is bad news for housing with people reluctant to make such a momentous decision as buying or selling a property if they are concerned about potential upheaval.

We have had clients get in touch today ready to make a move, who had been holding back while they waited on the election result. This is particularly true at the upper end of the market, where the spectre of a mansion tax if Labour were to be elected had dominated people’s thoughts and decision-making.

It is also good for foreign nationals who will continue to see London and the UK as a safe haven for their money and choose to come here rather than other countries, further boosting our economy with their spending.

It could mean a further uplift in prices in London and the outer areas in particular, although London values have already risen a considerable amount over the past year or so.

With lenders retaining an appetite to lend, and offering some excellent mortgage deals, plus certainty returning to the housing market, now could be a very good time to buy.

Jonathan Harris
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Jonathan Harris

Buy-to-let is booming as lenders regain appetite

05.05.2015

The popularity of buy-to-let shows no signs of waning with incredibly low mortgage rates and healthy yields compared with other investments.

While many lenders abandoned the sector after the credit crunch, they have been gradually returning and offering more buy-to-let mortgage options at cheaper rates. Landlords can access two-year fixes from 2.25 per cent or five-year fixes from just 3.49 per cent.

Opportunities in the buy-to-let sector are also growing as pension freedoms introduced on 6 April have left many people considering using their retirement cash to buy a property.

However, it is not just about cheaper mortgage rates – crucially, there has also been some movement from lenders on criteria. This is vital as it doesn’t matter how cheap the buy-to-let mortgage rate is if you can’t access it.

Landlords have faced issues with ‘stress testing’ where lenders have used a high notional rate rather than pay rate to ensure that the borrower can afford the loan following any interest rate increases. This can make it difficult to get the numbers to stack up, particularly in London.

However, there are options for landlords in London with some lenders prepared to stress test on pay rate. Please get in touch for more information.

Adrian Anderson
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Adrian Anderson