Search Results for: Mortgages
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Latest property news
Mortgage rates hit nine-year low
Interest rates on mortgages have hit record lows, but borrowers are being hit with higher fees, as banks look to protect their profit margins, according to figures from Moneyfacts.co.uk. The average interest rate on a two-year fixed mortgage fell to 2.52 per cent in February, down from 3.14 per cent a year earlier and the lowest level since Moneyfacts.co.uk, which compiled the data, began monitoring the sector in 2007. But while interest rates might be falling, banks are increasing the fees they charge borrowers to arrange a loan, with the average mortgage fee today being a full £68 higher than in June 2014 – hitting a 21-month high. Some of the fees borrowers are being asked to pay is nothing short of shocking – up to £7,499. “The current mortgage market boasts some of the lowest rates on record, which is great news for borrowers, but the increase in the average mortgage fee clearly shows that some of these headline grabbing rates are being compensated for elsewhere,” said Charlotte Nelson, from Moneyfacts.co.uk. “Some of the fees borrowers are being asked to pay are nothing short of shocking, with up to £7,499 being charged for some high value loans,” she added.
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Latest property news
Mortgage lending at seven-year high
Gross mortgage lending rose by eight per cent in 2015, taking the estimated total for the year to £220.3 billion compared with £203.3 billion in 2014, according to the Council of Mortgage Lenders (CML). The CML estimates reveal that gross mortgage lending hit £19.9 billion in December, three per cent below November’s lending total of £20.5 billion, but 23 per cent higher year-on-year at £16.2 billion. Gross mortgage lending for the fourth quarter was therefore an estimated £62.3 billion, up 23 per cent on the corresponding period in 2014. “The low inflation environment, along with real wage growth, an improving labour market and competitive mortgage deals have all helped to underpin demand,” said CML Economist Mohammad Jamel. Looking ahead though, he said the upside potential looks limited over the near-term. He added, “The supply of existing and new properties on the market remains weak and affordability pressures weigh on activity. There is an added element of uncertainty as we wait to see the impact of tax changes on the buy-to-let sector.”
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Latest property news
We are addicted to property
Ever since Margaret Thatcher declared her belief in a ‘property-owning democracy’ and introduced Right to Buy in 1980, the UK was converted into a nation obsessed with residential properties. Let’s be honest, many of us are preoccupied with our homes and particularly how much they are worth. Just turn on the TV or pick up a newspaper on almost any given day and you will find a story about property prices or mortgages and how they are becoming easier or harder to obtain. A new survey by Direct Line Home Insurance shows that 63 per cent of Britons browse property websites even when they are not looking to buy. Some 2.6 million browse portals like Zoopla or Rightmove at least once a day and 38 per cent admit they checked the price of someone else’s home online in the last year. The most enthusiastic property browsers were in Sheffield where 74 per cent confessed to window shopping for homes followed by 72 per cent in London and 70 per cent in Newcastle. People say that they look at online property portals to keep a check on house prices, look at design trends and also daydream about a future home. “We…
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Latest property news
Investors hung out to dry as BoE gets tough
The Bank of England has announced plans to introduce more stringent checks on buy-to-let lenders amid concerns that the property investment market is moving into bubble territory. The Bank’s Prudential Regulation Authority said it was putting in place a “guardrail” to prevent banks from making risky loans, warning that 20 per cent of lenders were not carrying out the necessary checks. The main concern is that a bubble in the buy-to-let market could cause a wider housing market slowdown, which would be bad news for millions of people who have invested in property, as part of their retirement. More than 1.7 million properties have buy-to-let mortgages, which represented 17 per cent of loans used to acquire residential properties last year. “You might form expectations about what the necessary long-term saving to support your retirement will be, which can then (if house prices fall) be transformed quite suddenly in ways that, frankly, are unwelcome,” Bailey said. Andrew Bailey (left), who currently heads up the Prudential Regulation Authority, told the press that the Bank of England has “nothing against” buy-to-let landlords, but believes that new restrictions on mortgages for buy-to-let investors will help reduce the risk of “very volatile boom and bust…
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Latest property news
Property franchises broaden their horizons
The Property Franchise Group has teamed up with Legal & General and London & Country to offer their customers mortgages across the whole of the market. The Property Franchise Group, the UK’s largest property franchisor with 287 offices nationwide trading under various brand names including Martin & Co, Whitegates, CJ Hole, Parkers and Ellis & Co, hope that the new financial services arm will help to significantly boost company profits. London & Country, the UK’s largest fee free mortgage broker with a 3 per cent market share, expect to arrange in the region of £9 billion worth of mortgages and process 43,000 applications this year, of which 20 per cent are buy-to-let. Phillip Cartwright, Managing Director of London & Country, commented, “Our partnership with The Property Franchise Group is mutually beneficial and we are delighted to be associated with the UK’s largest property franchisor. They have one of the biggest client bases in the sector and we are looking forward to helping their customers take advantage of our award winning, fee free service.” The new financial service offered by The Property Franchise Group will be available via telephone and online. “We chose telephone and web fulfilment because people are busy…
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Latest property news
Rush to purchase buy-to-lets before SDLT surcharge
Estate agents report that there has been a significant increase in the number of buy-to-let investors attempting to push sales through before this Friday’s stamp duty deadline. Landlord investors are naturally keen to beat the 1st April deadline, after which they will pay an additional 3 per cent above existing stamp duty rates on buying a buy-to-let property. Some 85 per cent of estate agents reported an increase in the number of buy-to-let investors looking beat the stamp duty changes on second homes in February as demand for housing hit a 12-year high, with an average 463 house hunters registered per member branch, according to the NAEA. Mark Hayward, Managing Director of the NAEA, commented, “It is evident from February’s report findings that we’ve seen a real sense of urgency from landlords trying to complete on sales ahead of the stamp duty reforms. However, the mounting pressure and increased demand for housing has meant that first time buyers have had to compete with landlords for property and as a result they have lost out.” Many housing market analysts expect the new buy-to-let tax measures to dampen demand for buy-to-let investments in the near term, while there is every chance that…
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Latest property news
Bank of England to consult on buy-to-let ‘prudence’
The Bank of England has published a consultation paper (CP) which seeks views on its proposals which could result in strict limitations for buy-to-let mortgages. David Smith (left), the Residential Landlords Association’s Policy Director said, “The Bank needs to be careful that it does not over-react to the current surge in buy to let applications which are aiming to beat the tax increases coming in April. ‘These include a three percentage points extra levy on stamp duty and abolition of mortgage interest relief. It is likely that the impact of these will significantly reduce the demand for borrowing. “We would urge the Bank to tread carefully and avoid any premature moves that could stifle the supply of the 1 million rental properties the country desperately needs.” The consultation paper says: Underwriting standards for buy-to-let mortgage contracts – CP11/16 Background This consultation paper (CP) seeks views on a supervisory statement which sets out the Prudential Regulation Authority’s (PRA’s) proposals regarding its expectations of minimum standards that firms should meet when underwriting buy-to-let mortgage contracts. The proposals also include clarification regarding application of the small and medium enterprises (SME) supporting factor on buy-to-let mortgages. Summary of proposals The proposals seek to ensure…
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Features
Leaving the scene
The number of accidental landlords soared during the recession but now they’re cashing out as house prices rise again. What, asks Nigel Lewis, does this mean for sales and letting agents?
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Latest property news
Landlords aim to beat tax rises
A growing number of property investors are choosing to acquire buy-to-let homes through corporate vehicles to get around paying an extra 3 per cent above existing stamp duty rates on second homes, mortgage brokers report. There has been a surge in demand for buy-to-let properties in recent months from investor landlords keen to beat the 1st April deadline for the stamp duty surcharge. But to avoid the hit, it has been reported that a growing number of landlords are setting up company structures to manage their rental properties. Mortgages for Business report that it has seen the proportion of applications acquiring property within a corporate vehicle surge from 18 per cent to more than 50 per cent in the past six months. Forming company structures to manage their rental properties will also enable many landlords to continue to deduct mortgage interest from their tax bill as it will be viewed as a business expense. This will allow higher rate taxpayers to more than halve their tax bill because they will pay corporation tax, rather than income tax, which will be 19 per cent from 2017, and will fall to 18 per cent by 2020. Similarly, the ability to take income…
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Latest property news
Connells eyes further expansion
The Connells Group is on course for what could be a record year in 2016 after seeing pre-tax profits increase sharply last year. The company, which this year celebrates its 80th anniversary and operates almost 550 branches nationwide, said all parts of the business “delivered a strong performance” last year. Connells posted pre-tax profits of £62.5 million for the year ended 31 December 2015, up 19 per cent year-on-year and an increase of 72 per cent over the last three years. But it is currently not known what the revenue figures for the year was as the Group did not disclose the data. David Livesey (left), Chief Executive at Connells, described 2015 as “another stunning year” for the Group, with all parts of the business delivering “a strong performance”. He commented, “The housing market has not been without its challenges, characterised by lack of stock, so to end the year with strong profits and having sold more properties than 2014 and 2013 is a tremendous achievement. “We remain at the forefront of our profession and to maintain this position we made further significant investments into the business in 2015.” Last year, the company ploughed £25 million into branch refurbishments, acquisitions,…
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