What will influence the property market this year?

These blogs and the information contained in them may no longer be current and therefore much of the information/figures quoted could be out of date and shouldn’t therefore be used as an indication of the current situation. If you require any further clarification please contact Derngate Wealth.

Your home may be repossessed if you do not keep up repayments on your mortgage

There are several factors that will influence not only house prices, but the availability of homes for sale this year:

Low interest rates

In late spring it is expected that rates will rise by an additional 0.25%, taking the base rate up to 0.75%. With more than 50% of all borrowers on fixed rate mortgages, most homeowners won’t notice this rise. There aren’t any further rate increases expected and mortgages will remain cheap, although inflation will outpace wage rises.

A rise in house building

Home building has increased; 217,000 new homes were coming on to the market in 2016-17, which is a rise of 20% on the previous year. Although this brings us back to the levels seen before the financial crash, it’s still short of the government’s 300,000 target. If migration numbers continue to fall and there is a continued increase in construction, supply could start to meet the demand for affordable homes.

First time buyers will triumph hover landlords

Buy to let lending is in decline, freeing up homes for first time buyers. In 2015, landlords bought almost 120,000 houses with buy to let finance but this is expected to fall below 80,000 this year. A rise in taxes and tougher lending criteria has tipped the balance in favour of homeowners.

Stamp duty cuts and Help To Buy

Stamp duty has been abolished for all properties up to 300,000 bought by first time buyers. This could save 20% of first time buyers up to £5,000. The Help To Buy scheme has also been given a boost of £10bn providing financing until 2021.

Relief for tenants

For many years landlords have been consistently increasing rents, but they are finding that they can longer push up prices. The average UK rents rose by less than 1% in 2017, and actually fell in London. Salaries are under pressure from inflation and therefore it is expected that rents will remain the same throughout 2018. There is also a new ban on letting agency fees, which will also help to keep rents down, although there is still no fixed date for the ban to be introduced, although it is expected to be this year.

If you are thinking of buying a property, whether it’s a first property or you wish to move up the property ladder, contact Derngate Wealth today.

https://www.theguardian.com/business/2017/dec/26/six-factors-influencing-the-property-market-in-2018

 

February 23, 2018adminBlog

Interest rate rise could mean an increase in your mortgage payments

These blogs and the information contained in them may no longer be current and therefore much of the information/figures quoted could be out of date and shouldn’t therefore be used as an indication of the current situation. If you require any further clarification please contact Derngate Wealth.

Over four million homeowners will see their monthly mortgage repayments rise following the announcement that the Bank of England has increased interest rates for the first time in over 10 years. Interest rates have risen to 0.5% from 0.25%, reversing the emergency action that was taken immediately after the Brexit vote.

The move by the Bank of England comes amid householders increase in rising prices, which is outstripping the growth in earnings, following the devaluation of the pound since the EU referendum.

The average rise for those on a variable rate will £22 per month, although the recent popularity of fixed-rate mortgages (due to the competitive deals that have been available) means it will initially affect less than half of households.

The Governor of the Bank of England, Mark Carney, has reassured consumers that it wasn’t the start of a sustained upward trend in rates. He stated:

“To be clear, even after today’s rate increase, monetary policy will provide significant support to jobs and activity. And the monetary policy committee continues to expect that any future increases in interest rates would be at a gradual pace and to a limited extent.”

According to The Telegraph, experts are expecting two further quarter-point increases in interest rates by 2020, which would leave them at 1%.

The rise in rates has raised questions over the ability of homeowners to repay their outstanding loans given that there has been a steady rise in personal borrowing and credit cards in order to offset higher prices.

According to accountancy firm Moore Stephens (The Telegraph) over the first year of this rate rise, households are expected to face around £1.8m in additional interest. In addition, Moore Stephens has estimated that households will pay around £465m in additional costs on credit cards, overdrafts, personal loans and car finance as a result of the rate rise. In fact, in recent months there have been some signs of consumers using their savings or borrowing money via bank loans or on credit cards to keep up with day-to-day spending.

On the flip side, savers will benefit from the rate rise, with the increase in rates already being passed on by some banks.

If you would like to find out how the recent rate rise will affect you, contact Derngate Wealth today.

Your home may be repossessed if you do not keep up repayments on your mortgage

– https://www.telegraph.co.uk/personal-banking/mortgages/happens-fixed-rate-mortgage-ends/