Now January is well and truly behind us and, by the time you read this, February as well, we’re definitely seeing a major upturn in business right across the board. With this in mind, I though it prudent to let you know where this business is coming from and what’s available.
First Time Buyers – There are new incentives from lenders in order to encourage first time buyers. The number of 95% mortgages on offer remains constant, while financial incentives such as refund of Stamp Duty (up to £2500), free valuations and cash back on completion help to entice first time buyers out of hibernation – even if the weather doesn’t! With rates at record lows, it really is a great time to buy. House prices in Essex increased by an average of14% in 2016 and areas like Basildon grew by 19%. Using Basildon as an example, a property costing £200000 at the start of the year was at £238000 by the end of the year. I bet you wish you’d taken that leap last year but, as the old Chinese proverb says, ‘The best time to plant a tree was 20 years ago. The second-best time is now’.
Remortgaging – Rates are still dropping but surely can’t go much lower. With two-year fixed rates for that perfect customer now around the 1% mark, five-year fixed rates below 2% (and it’s even possible to have a 10-year fixed rate of 2.19%!) why wouldn’t you look at remortgaging? The savings are massive! You’d think people would jump at the chance, but many people are now out of their current deal and sitting on the lender’s standard variable rate. Unless there are extenuating circumstances then this is absolute madness. You heard it here first. For instance, a £200000 mortgage on a two-year fixed rate of 1.14% as opposed to a standard variable rate of 4.54% would save you nearly £600 per month in interest payments. Yes, six hundred pounds a month. What could you do with that sort of extra money? I’ll leave you to ponder…
Buy to Let – The real trend here is the Limited Company Buy to Let. With the recent changes in the perception of the Buy to Let market regarding taxation and so on, many people are now forming Limited Companies to purchase their new rental property. They opt for a five-year fixed rate mortgage to get around some of the more onerous stress testing. This seems to be one of the only ways that you can still purchase locally with just a 25% deposit. The new Prudential Regulation Authority (PRA) rules mean that the rental incomes achieved are only sufficient to gain you a mortgage of around 60% on any deals under a five-year fixed rate. The buy to let market is certainly having to adapt at great speed to the government’s intervention (or, as I call it, meddling) and it’s definitely becoming far more specialised from a broker point of view when offering complete advice.
In summary – The 2017 mortgage market is very, very different to what was happening this time last year and, from my point of view, it’s becoming more complex to understand all the intricacies that lenders are using to differentiate themselves from their competitors. After all, they simply don’t have the margins now to make it all about the rate. With this in mind, the Independent Mortgage Broker is now becoming a more valuable asset when it comes to choosing your next mortgage. At Zing, we are insisting all our advisers are attending as many training courses and seminars as possible to ensure that they are constantly abreast of the many changes going on in the mortgage market.
To review the mortgage choices available to you why not give Zing a call to book your appointment? Our advisers are available daytime or evening, weekdays and weekends. We’ll even meet with you at your home to save you any inconvenience. As our website says, we’ll be beside you all the way – smoothing out all the possible glitches, so your house-buying experience becomes as stress-free as these transactions can possibly be.
For more information contact:-
Zing Mortgages: Office: 01702 423900;