Blog Archives

With a potential rate rise on the horizon, what next for borrowers?

27.10.2017

With Britain’s economy growing faster than expected in the third quarter of the year, according to the Office for National Statistics, the likelihood of an interest rate rise at the Bank of England’s meeting next week has increased. But what does this mean for borrowers?

Whether the base rate rises or not is largely academic, as the expectations of higher interest rates have already filtered through to mortgage pricing. Many fixed-rate mortgages have already become more expensive with most lenders increasing the pricing on some, or all, of their product ranges.

However, it is not necessarily as straightforward as that. Challenger lender Metro Bank this week reduced its five-year fixed rate for up to 90 per cent loan-to-value deals by 10 basis points to 2.54 per cent. At the same time, the lender marginally increased pricing on two- and three-year fixes, while five-year fixes at 65 and 70 per cent LTV were withdrawn. It is clear which areas of business the bank is keen to promote.

Another lender, TSB, increased rates by up to 0.2 per cent on seven of its fixed-rate remortgage deals and removed its three-year fixed-rate deal at 90 per cent LTV.

As lenders jockey for position, independent advice is more important than ever. There is no need to panic as the rate increases we have seen so far have been relatively  modest but equally borrowers should not hang around, particularly if they need the security of a fixed rate to help with budgeting.

Adrian Anderson
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Adrian Anderson

Lending options improve for the self-employed

04.10.2017

With almost five million self-employed workers in the UK, according to the Halifax, and almost 40 per cent of employment growth coming from the self-employed or small business owners over the last decade, self-employed borrowers should be big business for lenders. However, this sector has been poorly represented and supported by banks for some time.

The good news is that the situation is changing with the availability of mortgage options for the self-employed improving in recent months. Halifax is the latest lender to act, reducing the income information required for self-employed customers from three to two years.

The main issue for lenders has been a general lack of understanding regarding the way that the self-employed take their income and minimise unnecessary personal tax. However, lenders are upping their game, recognising that the self-employed are heavily invested in their businesses and therefore represent a low risk to them.

A handful of lenders are catering well for the self-employed, such as Kensington, Coventry Building Society, Metro and Santander. The key areas where underwriting has improved centre on recognising all forms of income i.e. salary, dividend, retained profits in the business.

So whether you have just one year’s accounts, an accountant’s reference, are a lawyer or doctor buying into a practice or are becoming self-employed or becoming a member of a limited liability partnership (LLP), there should be a lender who can help. Get in touch for more information.

Jonathan Harris
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Jonathan Harris

A mortgage for life – Daily Telegraph podcast

02.10.2017

Anderson Harris director Adrian Anderson was asked to talk to the Daily Telegraph about the various options for older borrowers and whether plans to introduce a mortgage for life, rather than insisting that all lending is paid off by retirement, is a good idea.

Click here to listen to Adrian (from 19.45 minutes in)

 

Adrian Anderson
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Adrian Anderson