On what seemed like a relatively normal Thursday, the Bank of England base rate has changed – something we haven’t seen for 10 years, at midday Mark Carney has confirmed that interest rates are being increased to 0.5%. A new stimulus package has also been introduced. It is clear that this is an attempt from the Bank of England to cushion the potential shocks of BREXIT. Many homeowners and property investors with tracker and variable mortgages are seeing a reduction in their mortgage payments which brings much joy to general consumers with mortgages and investors alike. Interest on debt will also be reduced for many and burrowing for business will be lower. Although businesses can benefit from reduced interest on loans, the pound has been hit in the short term meaning that any businesses importing goods may feel import costs have increased further than they already have which is a squeeze on margins and profitability. Of course a weaker pound for exporters has the opposite effect and works in their favour.
Because of the news, a new range of cheaper fixed products are being introduced on to the market as we speak so if you are looking to fix, now is a good time. Burrowing to buy a property is even cheaper now than it has been previously been and we expect lenders to reduce criteria on rental income on buy to let mortgages meaning you could achieve more burrowing than previously. Mark Carney has confirmed that savings on interest rates will be passed on to consumers and have a new initiative to make sure banks are lending. We therefore feel that that with the extra stimulation, banks will be offering mortgages and loan products at exceptionally low rates. Call us at www.lombardfunding.co.uk on 0207 101 9598 to discuss the best rates available so we can get you the best deal if you are looking to buy or refinance.
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At Lombard Funding we specialise in getting you the best possible rates but also realise how important it is to be able to get you the level of borrowing required given your situation. We have a current exclusive bridge loan rate of 0.44% per month available to light refurb clients with LTV up to 50%. Our knowledge and relationships within the Bridge loan market/ development finance/ buy to let and residential mortgage market means we can place deals where others cannot. We have not just a whole of market panel but a significant offering with many lenders unknown to other brokers. This includes access to private banks and specialist lenders. Having a larger and more diverse panel means we have access to better rates and a lending offering that can fit a wider variety of scenarios. Speak to us today to discuss your needs with one of our experienced brokers. We will have an initial chat with you to discuss your requirements and look at the best options to achieve a fast completion.
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While property prices in London continue to be the highest in the UK, they’re also pushing more and more people out of the city into more affordable areas, making the ripple effect more pronounced than ever. If you’re looking to buy in or around London, now’s the time to get into the market before prices shoot up further. The data collected by the Office for National Statistics is collected from mortgage lenders across the country.
The area which has shown the strongest growth is the south-east, with an 11.4% increase on last year. The English average inflation figure for house prices was 8.2%. Most buyers surveyed by the Office for National Statistics cite their reason for relocation as wanting better value than they’d get from housing in London. This ripple effect has pushed prices up across the region though, with average property prices creeping closer to £400,000, way above the national average of £284,000.
In fact, it was good news for sellers all over the UK, with prices increasing across the board, with the exception of prices in Scotland, which fell 0.8%. London prices increased 9.7%, and the east of England’s values hit double figures, with an increase of just over 10%. Wales and Northern Ireland both saw increases of just under 3% in their house prices.
Connell’s estate agency reported that they’d carried out 21% more valuations in March than they had in February, and 41% of their March valuations were for first time buyers, which is encouraging as it shows that the property market isn’t scaring off those about to take their first steps into the housing market. Other agents said that March had seen an increase in business simply because buy-to-let investors were rushing to get their purchases finalised before the 3% stamp duty penalty came into force in April.
When it comes to house prices in the 12 months prior to February 2016, it was more encouraging news for house buyers, with inflation slowing to 7.6%, down 0.3% from January. Based on these figures, industry economists are predicting another house price increase of about 6% during 2016. It looks like now is definitely a great time to buy outside of London!
Until they come to count the pounds and do the sums, very few people have a full idea of the actual cost of buying a property. They might have a vague idea but it’s research and full consideration which leads many people to put their plans to start viewing properties on hold for a further few months while they add to the fund.
However, for ease of reference, anyone seeking to buy a house would be wise to consider the following when working out how much they need to save:
100% mortgages (where the amount borrowed is 100% of the property purchase price) have become all but obsolete – the vast majority of high street lenders won’t even consider a 100% mortgage. In modern, post-recession times, a buyer will have to put at least 5% of the value of the property towards the purchase as a deposit. In many cases, a lender will require their borrower to put closer to 20% of the property value as a deposit and will offer more attractive interest rates to those with higher deposits.
It is virtually impossible to purchase a property without the assistance of a solicitor. In addition to ensuring the property is as it should be on behalf of the buyer by way of carrying out searches and surveys with local authorities, water agencies and (where applicable) the coal mining authority, they will also ensure it is properly registered to the buyer and their lender once the sale has been completed. Legal fees vary between areas but on average the cost of a solicitor to carry out conveyancing is in the region of £1,000.
Most lenders have arrangement fees (which is to say the administration fees they require to put the mortgage in place) which must also be paid. Some of these institutions may offer to add the fees onto the total amount payable, but it’s worth noting that in this case, there will be interest to be paid and it could end up costing far more than if they had been paid outright in the first place.
To discuss buying a property and getting a mortgage give us a call on 02084324566 to speak with one of our advisers who can guide you.
One of the consequences of the banking crisis was a tightening up of the lending criteria used by most mortgage lenders, which famously made it harder for homebuyers, particularly first time buyers, to obtain home loans. The days of five per cent deposits – and even 100% mortgages – were clearly over and new affordability checks threatened to make it even harder to obtain mortgages. Consequently, without financial assistance from family to raise the necessary deposit, the average age of first time buyers rose to 35.
Introduced by Chancellor George Osborne in 2013, the Help to Buy scheme aims to provide financial assistance to first time buyers and other home movers looking to get their feet on the housing ladder. For first time buyers, the scheme offers several benefits:
• Raising a deposit of five or ten per cent is challenging enough for many first time buyers, but small deposit mortgage schemes often levy higher interest rates, meaning the preferential offers are simply out of reach. With the Help to Buy scheme, it’s easier for first time buyers to have a deposit towards their home.
• During the first five years of the mortgage, no interest is due on the Help to Buy loan, making it easier to meet the monthly repayments and to start to pay off the capital.
• As the first time buyer needs to borrow less capital under the scheme, it’s easier to pass affordability tests and more likely that more competitive interest rates will be offered than on 95% mortgages.
• The interest rate on the Help to Buy loan, after the initial interest-free period, is far more competitive than comparable long term loans.
Even with the financial support offered by the Help to Buy scheme, obtaining a mortgage is still a complicated area, with a vast number of contrasting offers available. Securing quality mortgage advice from an independent, professional broker such as Rated Financial Advisers can help you to secure the most competitive deal for your personal needs. To see how Rated Financial Advisers can help you, contact us today on 02084324566.