Mortgage Availability Remains Low and an Increasingly Volatile Property Market Doesn’t Help
The recovery of the UK economy has been a worry for many, with slow growth on house prices and a sluggish increase in mortgage lending. Statistics released by the Bank of England suggest that the rate of recovery and growth is losing speed rapidly since the financial crisis.
Net lending that was lent out against the value of homes rose only marginally, which is in stark contrast to the January to February figures, which witnessed a significant rise.
There have also been various comparisons against previous years, which show that lending figures and house prices are far lower. All of this information suggests that there is some way to go before we begin to see a real recovery of our markets in Britain.
One expert believes that the final quarter of 2010 was a blip rather than an early boom for the housing market. Lending and house sales increased towards the end of 2010 as more first time buyers then normal were looking to get onto the property ladder and this seems to have skewed the figures.
Buyers are still quite nervy about what will happen in the coming months, and it is really no surprise as most are very aware of the extent of the financial crisis that began three years ago.
Another economist has offered comments on the fact that property prices and mortgage lending would be unable to increase quickly while other sectors remain slow and steady, as this may cause another crash to occur. With unemployment levels still very high, and the total debt in the UK still being very high, it is impossible for one sector to recover without having a knock on effect on other areas.
It has also been said by certain mortgage organisations, that although the economy is still very slow, there are still some very cheap and competitive remortgage deals available on the market.
Household finances are under a lot of pressure, said Mr Parnell, adding “and as a result demand for house purchase loans fell in the first three months of 2011.”
He also stated that the availability of credit is predicted to increase during this quarter, a factor which should give badly needed support for the housing market. Mr Pannell also cautioned that this support would be crucial to the recovery and would serve mainly to stabilise the housing market rather than commence a boom.
The CML economist also pointed to the fact that February 2011′s mortgage approval figures were amongst the highest seen in the last two years, suggesting that the market is starting to pick up. He also reported that the demand for remortgages from homeowners remains strong, partially due to the prospect of interest rates rising as inflationary pressures continue to bite. Many consumers are looking to fix their mortgage payments in advance of possible interest rate rises. Mr Parnell also believes that increased numbers of remortgages will help support overall mortgage lending in the UK.
Howard O’Gollegos writes for Just Commercial Mortgages.com the UK’s No.1 site for the latest commercial mortgage rates and commercial property finance news.
With Rampant Inflation Saving Every Penny is Vital – So Let’s Make Them Count!
A recently published survey has found that three in ten Brits are at the point where increases in their living costs would mean they would struggle to make ends meet. Thirty per cent of Brits are at the ‘affordability tipping point’ meaning that an increase of under £100 in their monthly expenses would result in them not being able to pay all their commitments.
Equally unnerving news, is that almost a quarter of families have reported that any increase in living costs whatsoever would cause them to be unable to afford to pay their bills. This is frightening news, when we are seeing the prices of commodities such as petrol and diesel and general daily living increasing rapidly by the day.
Moving Back From the Edge: Although we are unable to make a difference to the cost of the goods and services that we pay for, it is possible to reduce your monthly outgoings by just using a little more caution, and by cutting costs on various monthly outgoings, such as household bills, food shopping and mortgage repayments. We will now explore these various cost cutting ideas.
There are various ways to save money including using your vehicle less often and walking to work or to the shops when possible, or buying cheaper foods when doing your weekly or monthly shop. You can also try exercising at home rather than going to a gym to save extra money every month.
When food shopping, try to avoid name brands in favour of supermarket own-brands. Even better switch from own-brands to budget ranges, you will rarely notice any difference. Shopping on a fixed budget will tend to take more time and effort, but it will also reap massive savings. Walking away with a full trolley and cash still in your pocket is a very rewarding feeling. Why not try switching fresh produce items for their frozen equivalents to save even more money. IF you have an eye for an offer, a large chest freezer can be very useful in storing supermarket ‘buy one, get one free’ offers.
You can also try to reduce your household bills by avoiding using the central heating in warmer weather, or using blankets instead of the heating on cooler evenings. Also things like ensuring that outside doors and windows are kept closed. Low energy bulbs can also help to save on electric, while washing your clothing at 30 degrees can save a lot too.
But cutting costs on your household bills and daily expenses isn’t the only way that you can save money. Your credit outgoings such as mortgages and credit cards should also be shopped around for to lower your monthly costs.
Remortgaging Options: If you happen to have a fixed rate mortgage on your home which is drawing to a close, the monthly savings you could make by looking at remortgage rates might be sufficient to escape from the tipping point.
A five year fixed rate mortgage agreed between 2006 and 2007 will be far more costly each month than one carried out in 2011, with the Bank of England’s base rate of interest set at 0.5% compared with 5% at the end of 2006.
As interest rates are expected to rise in late 2011, taking advantage of low remortgage rates should be a priority. By researching the market now you can compare remortgage deals in order to find a product that will help you to save money.
Howard O’Gollegos writes for Just Commercial Mortgages.com the UK’s No.1 site for the latest commercial mortgage rates and commercial property finance news.
Maximise Your Property’s Value By Implementing These Simple Tips¦
The commercial mortgage process is notorious for the long; drawn out manner they can take, making residential mortgages seem easy by comparison. Everything from securing the funding, to building surveys and insurance takes at least twice as long to set up and complete and that’s before we even consider the mountain of legal paperwork to wade through.
The figures show that estate agents have seen an increase in the number of house sales in April. According to the report, surveyors have also seen an increase in house sales, with more buyers and lenders requesting valuations on properties.
Many of those who are selling their properties however have been disadvantaged to some extent by the property price crash, as they have lost out on large chunks of the value of their homes. The house prices are now at their lowest level in many years, so they may have to sell their properties for less than what they had hoped.
It’s All About Location: Going for a renowned law firm based in The City is not always the best option, if anything hiring a local, smaller law firm could be the wiser strategy. A local firm will have much more experience and better local knowledge than a national or international firm, they will know which searches and databases to check and search and any miscellaneous issues you might not have been aware of. They’ll probably be a lot cheaper than larger national law firm as well!
Cost: While you want someone local, that doesn’t mean to go for the lowest denominator, in other words the cheapest solicitor you can find. You will want someone you can trust and who will put the hours in to get the job done, and in most cases the cost reflects the quality. Talk to a number of firms and treat it as an interview to see what services they will offer during the process and pick the one that suits your requirements.
Increasing the living space in your home also adds value which is why loft conversions are increasingly popular, particularly if you can fit an additional bathroom as well as an extra bedroom.
Indeed, adding an extra bedroom can often be a way of improving your home’s value – if there is a demand for it. In an area popular with families, converting a garage or loft or building an extension to add an extra bedroom can significantly increase the selling price of your home.
Experience: Many firms and solicitors will be experts in niche areas, even within the commercial property sector, so find out what experience they have and if it will be major benefit to you and your transaction. Doing background research yourself should be simple enough, either through the SRA or Law Society for qualifications and experience, even LinkedIn might have the answers you seek.
If it’s a medium to large firm of solicitors, make sure you ask who you’ll be dealing with most of the time, will it be the less experienced junior partner or the guy running the show. When you meet the solicitor it could be the head of the firm/department who then will just assign the case out, so double check who you’re actually getting to avoid confusion down the line and that the service arrangements are clear for both parties.
There’s never a shortage of commercial property solicitors and many commercial mortgage firms will have recommendations for you. Taking the time to find who’s right for you should be a top priority as it’s possible this will be the most expensive part of the mortgage to handle, (outside of the deposit of course!)
Howard O’Gollegos writes for Just Commercial Mortgages.com the UK’s No.1 site for the latest commercial mortgage rates and commercial property finance news.
The Mortgage/Remortgage Market is Still On Shaky Ground – Dont Expect The Recovery to be Stable
Since the market crash of 2008, buyers and home owners looking to remortgage have found it very difficult indeed to find a lender who is willing to lend them money in order to purchase a property or remortgage their home. But there are signs that the markets are recovering with lending back on the up.
Those who had bad credit history or very little in the way of deposits who defaulted on loans were originally thought to be guilty of causing the financial crisis and so lenders tightened their strings. However the statistics being released showing the recovery of the markets in the UK has brought the lenders back out of their shells.
The progress has not been even, however. In March, UK mortgage approvals were fewer than originally forecast, so there may be unexpected complications yet. Many city insiders were hoping for a robust recovery through March, but one failed to emerge. Predicted increases of 48,000 stopped 500 short of target. That suggests that even though the situation is improving steadily, market confidence is limited and the recovery ahead may still be difficult.
There are always seasonal fluctuations in mortgage approvals based on Britain’s climate and culture. This fluctuation in the rate of mortgage approvals is often predictable and cyclical. Estate agents are often quick to point out that that the market traditionally slows down towards the end of the year, usually starting at around September time.
As the housing market quietens, fewer buyers will register with estate agents and this results in a reduction in the number of properties sold. These seasonal variations had a big impact during the global financial crisis as the market was already struggling, although as Britain comes out of recession the housing market is more able to cope with seasonal variations.
First time buyers who are getting a foot on the property ladder are always essential to the market. This being so, it is alarming to note that there has been a drop in the proportion of first time buyers recently. This is most probably due to increases in house prices and a fall in lending, which economists have claimed is caused by a lack of availability in the market.
These statistics can see huge changes year on a year and are historically volatile. An example of this was seen in September 2008, when first time buyers made up only 10% of the market, whereas a year later they represented 25% of the market.
As the market in the UK can vary so suddenly, economists have found it hard to predict long term trends. Some organisations, such as the National Association of Estate Agents (NAEA) have called for the government to intervene in order to help the recovery of the housing market.
As the number of mortgage and remortgage approvals have risen, so have the number of unsecured loans. Consumer lending has also increased in 2011, suggesting that banks and building societies are starting to return to the levels of lending seen before the global financial crisis.
Some experts believe that house prices will once again start to fall over the next few months. Whilst this may benefit cash buyers or those people with a large deposit, vendors may once again be facing bad news as they look to sell their homes.
Howard O’Gollegos writes for Just Commercial Mortgages.com the UK’s No.1 site for the latest commercial mortgage rates and commercial property finance news.
Improve Your Property Value By Sprucing the Place Up, You Don’t Always Need Costly Renovation Work
With many people unable or unwilling to sell their properties thanks to falling prices, thousands of Brits have turned to improving their homes in order to add value or make them more attractive to potential buyers. An improving range of remortgage rates is helping more and more people redecorate and refurbish their homes, making them nicer to live in as well as increasing their value.
Taking out a remortgage to fund home improvements and renovations could result in you saving substantial amounts of money over the long term, because the interest is likely to be lower than comparable rates on other loans. In addition to this, a reduced mortgage rate will help you to save money throughout the life of the loan on the property.
There are hundreds of different mortgage contracts available so it is vital that you research, and use the services of a mortgage broker if required to ensure that you are making the right decisions. Borrowing additional funds, known as a further advance, is generally much lower cost than personal loans too, so it is the better option of the two in terms of cost.
And you don’t have to spend huge amounts in order to add value to your home with home improvement products. A lick of paint, new home furnishings and so on can significantly increase the likelihood of your home being sold in the future, as it makes the property look fresh and looked after, which can attract many more buyers than a rundown property or a place in need of updating.
So, if you are looking to add value to your property, it’s crucial that you undertake the right improvements. A popular way to make a property more attractive to buyers is to refit the bathroom and/or the kitchen. An old or worn kitchen or bathroom is a major turn-off and will damage the value of your home. This is because buyers will factor in the cost of refitting these rooms when deciding what to offer.
When changing the kitchen or bathroom quite, ensure that the updated version is in keeping with the rest of the property, as a room that doesn’t match the rest of the house can put people off and it may make the property more difficult to sell to potential buyers.
If you are looking to increase the value of your home, another idea is to add an extension to the property as you can then increase the size of the rooms in the property or add new ones. This is a particularly good idea in properties with small kitchens or living rooms.
It is also important that you weigh up the pros and cons of such work. For example, whilst an extra bedroom may be useful in a family area, your garage might actually be more valuable if you live in a location where off road parking is at a premium.
Many potential buyers will be looking out for the amount of storage space available too, so it’s not a bad idea to create some if you don’t have much of it. If you have space under the stairs you could make this into a cupboard and so on.
The final way to ensure you maximise your property’s value is to ensure that you repair any major defects. Buyers will be put off by the potential cost of replacing central heating, rotting windows or old fashioned boilers and so make sure you deal with any of these issues before your home goes on the market.
Howard O’Gollegos writes for Just Commercial Mortgages.com the UK’s No.1 site for the latest commercial mortgage rates and commercial property finance news.
Falling Property Prices and the Economy are Two Sides of the Same Coin – Look Closely at One and Take Advantage of Both
Our post industrial economy has been built on twin housing and financial bubbles, both of which have spectacularly burst. Now our economy is dependent on a struggling housing market. The housing boom collapsed dramatically in 2007 and prices have crashed and are unlikely to improve in the coming years. Many industry insiders and analysts have claimed that house prices are likely to remain relatively low for a few years to come, which leaves many property owners in negative equity faced with a huge problem.
In such times as this when it may be difficult to see your home, another option may be to remortgage to unlock some of the value of your home in order to finance a home improvements project to increase the value of your property.
Martin Ellis, housing economist for the Halifax recently said: “The underlying trend in house prices continues to be one of modest decline”. That view has been borne out by recent figures from the bank which show that house prices fell 3.7 per cent between April 2010 and April 2011. Data from the Nationwide, the UK’s biggest building society, shows a similar trend.
Until such as time as affordability in the UK improves and more people have the cash to buy a property at the average price of £161,000, prices are set to remain stagnant. With the Bank of England Base rate remaining at 0.5 per cent for over two years it has also been hard for buyers to save enough of a deposit to fund their property purchase.
What You Can Do To Maximise the Value of Your Home: Loft Conversion – The Halifax’s most recent report indicates that a simple loft conversion is the most cost effective method for growing the value of your home, because it offers the most scope for recouping your expenditure through the increased value it adds to your property.
A new kitchen – Many homeowners have used the best remortgage deals in order to fund the refit of their kitchen. It is one of the most popular ways of improving a home’s value and also makes a property more attractive to prospective buyers.
A very simple and inexpensive project that can add to the value of your home is redecorating and modernising the interiors. If you don’t have the finance available, again you could remortgage and obtain a further advance to pay for the job to be done to a high standard.
Adding an extension – Increasing the number of rooms and the space available in your home is a great way of adding value. Extensions can be expensive and you are likely to need planning consent, but adding a bigger kitchen or extra reception room or bedroom can help maximise your home’s value. You could also consider adding a conservatory to increase your downstairs living space.
Landscaping – Improvements to the exterior of your home such as a landscaped garden or decking can make your outside area more useful and help to add value.
Homeowners worried about the costs listed to above, especially relating to the value of their properties, should act now by investigating accessing finance through a remortgage scheme and implementing one or more of the strategies discussed.
Howard O’Gollegos writes for Just Commercial Mortgages.com the UK’s No.1 site for the latest commercial mortgage rates and commercial property finance news.
Remortgage Applications Continue to Surge to Make the Most of the Low Base Rate Before it Rises in 2012
Since the financial crisis in the UK, the Bank of England base rate has remained at its all time low of just half a percent. However earlier in 2011, the Monetary Policy Committee of the Bank of England confirmed that although they had voted against an increase at the time, an increase later in 2011 was inevitable. The Governor spoke out and said that it was impossible for rates to stay so low if we are to see the economy of our country recover.
Many experts expected the Bank of England to increase interest rates in early 2011 to help control inflation. However, the news that the UK economy had once again contracted in the final quarter of 2010 led the Monetary Policy Committee (MPC) to keep rates on hold.
What Does This Mean for Mortgage Borrowers? An increase in the cost of borrowing will be a chief worry for homeowners who presently are on a tracker or a variable rate mortgage. The variable rate mortgage product is one in which the rate of interest on the loan is evaluated periodically and altered by the lender, usually tracking the rate set by the Bank of England’s MPC.
Considering many people are enjoying the benefit of low repayments since the Base rate reached its record low in 2009, any increase in their monthly outgoings may hit them hard.
An increase in the base rate of just half a percent to one percent would mean that the average family would pay almost an additional £50 per month in mortgage repayments. This coupled with the constantly rising daily living costs and prices could send many to their financial ‘tipping point’, whereby they struggle to afford their living costs.
Today, almost 60 percent of borrowers have either variable or tracker rate mortgages, so of course increases in interest rates would affect all of these people. The news of an increase later in the year has caused a surge in remortgages in order to fix costs in the future.
Latest Evidence Shows Many are Reacting by Remortgaging: The number of remortgage approvals has started to increase in 2011 as more and more people react to the prospect of rising interest rates. The Council of Mortgage Lenders (CML) recently reported that there were 33,900 remortgage approvals in March 2011, up 16 per cent on February’s figures.
A spokesperson said that they believe the news that interest rates are going to increase later in the year is the reason for the sudden increase in remortgaging.
Fixed rates have been particularly popular with homeowners looking to remortgage. With an estimated eight million households at risk from increased mortgage payments, borrowers have been turning to fixed rate remortgage deals to protect themselves against interest rate hikes.
Fixed rate mortgages guarantee the interest rate and repayments for a specific period of time; typically between two and five years. It provides the security that the monthly repayments cannot rise for a certain period and the stability of knowing exactly what your mortgage repayments will be.
Howard O’Gollegos writes for Just Commercial Mortgages.com the UK’s No.1 site for the latest commercial mortgage rates and commercial property finance news.
The Property Market is a Buyer’s Market – What Can Seller’s Do To Tip The Scales?
The Royal Institute of Chartered Surveyors has recently issued a report stating that sellers are returning to the property marketplace, though it tempers this optimism with news that the overall picture remains “subdued”. A growth in the supply of properties for sale in April has probably increased the downward motion of house prices, and suggests supply is outstripping demand.
The number of buyers viewing property has also increased – helped in part by some excellent weather at Easter – but continued problems in obtaining mortgage finance is hampering many potential purchasers. Unless buyers have a good sized deposit, it is tough to obtain the mortgage they need to buy property.
The lack of activity is therefore stalling any housing market recovery and experts do not believe this is likely to change any time soon. Whilst Michael Newey from RICS believes that ‘the return of sellers to the market is positive’ other factors are holding back any significant recovery.
One of the UK’s leading property websites did a poll recently and found that almost three quarters of people believe that property prices in the UK will either remain the same, or be slightly higher in twelve months from now.
This shows that more people are optimistic about house prices going forward. But the problem is if you don’t have the cash to put down a deposit and buy now, you’ll more than likely be paying higher prices for your property in the future.
The poll also asked whether people believed that properties were currently undervalued, with over 40% of people answering yes. Of course, this may explain while, although there is more activity in terms of houses being put on the market, it is still nothing like the numbers that we saw before the financial crisis.
Those who are unable to put down a decent size deposit are likely to find it very difficult to obtain finance to buy a home since the market crash, and although lenders are loosening up a little, they are still reluctant to lend more than an 80% loan to value.
Many people then are turning to remortgages to improve their current homes rather than buy a new one. This is a great idea in the current climate, as selling your home while the property values are so low would mean potentially losing out on huge amounts of growth, and possibly ending up in negative equity.
If you cannot reduce your property price in order to sell your home then an alternative could be to look at remortgage deals to reduce your repayments. You can delay the sale of your home for a year or two until the property market starts to recover and benefit from lower mortgage repayments in the meantime.
The outlook appears bright for the future, with most feeling optimistic about the recovery of house prices and the mortgage markets, and therefore it seems like a great idea to obtain a remortgage, lower your interest rate and simply ride it out for a few more years. It will be worth the wait.
Howard O’Gollegos writes for Just Commercial Mortgages.com the UK’s No.1 site for the latest commercial mortgage rates and commercial property finance news.
Cut Your Monthly Outgoings By Potentially Hundreds of Pounds With a Remortgage
Are you looking for a better deal on your mortgage? If so, a remortgage could be the perfect solution. A remortgage involves switching your mortgage from one provider to another without moving home. There are lots of reasons to consider a remortgage such as to secure a better interest rate on your mortgage when your current deal expires.
Some people remortgage simply to get a lower rate of interest, while others want to raise additional funds for home improvements or to buy another property. Perhaps if your circumstances have changed and your earnings have increased or decreased, you may be able to find a different mortgage contract that is more suited to your new lifestyle.
One of the main reasons that Brits remortgage is to secure a more competitive interest rate. This can help you to reduce your monthly repayments which, in the present economic climate, are a benefit to many households. In order to maximise your savings, it is vital that you research the remortgage market in order to find the very best deal.
There are hundreds of remortgage deals available with dozens of lenders and so finding the right rate can be tough. Seeking professional advice can help you find the right deal, and a financial advisor or mortgage broker can also explain the various costs involved in the remortgage process. These may include valuation fees, arrangement fees and conveyancing charges.
You might need to pay an exit fee to your existing lender, for example, and a new mortgage arrangement fee with your new lender. There are always valuation fees, and you might be faced with an early redemption fee, so it is useful to have someone help you through the wide range of options.
Keep it in mind however, that although the remortgage markets picking up, many people are still finding it difficult to find a better deal if they are borrowing a high loan to value against their home. You will typically need at least 20% equity in your property in order to improve on your current deal and move to another lender or product.
For instance, there are only a few remortgage deals out there right now for people who want to take on higher risk and borrow more than 75% of their homes value. If this applies to you, you might have to accept that it might be harder to improve your current deal; you may even wish to modify your plans. The remortgage market is gradually improving however; according to a recent report by the Council of Mortgage Lenders. It showed that remortgage approvals in February 2011 were the highest for more than two years.
You also need to consider what repayment method you would prefer. Remortgage can allow you to switch from interest only to full repayment, which is great for those who want the entire mortgage to be paid off at the end of the term.
It’s also crucial that you consider the total cost of remortgaging, not just the headline interest rate. For example, a great rate may come with a significant number of fees which outweigh the savings that you will make. And, always make sure that you regularly review your mortgage arrangements as deals change all the time.
Don’t forget to look at the whole cost of the remortgaging package, not just the interest rate, as this can make the difference as to whether it is viable to go through the process or not. Finally, watch out for fluctuations in the market that occur at regular intervals. Deals change quickly, so the top deal you get today may be bottom of the pile in six months.
Howard O’Gollegos writes for Just Commercial Mortgages.com the UK’s No.1 site for the latest commercial mortgage rates and commercial property finance news.
Revotation, Rebuilding and Repairing – It Can All Be Achieved Through a Remortgage
The extremely slow growth of the property market and the fact that lenders are now loosening up their lending criteria means that more and more people are looking to remortgage in order to fund home improvements rather than move house.
There may be many reasons for this: adding more space to the property to improve living standards, adding a bedroom for a family addition or even simply to add value to the property as an investment.
The government have also spoken out recently, stating that they are prepared to put systems in place to help people to build and extend their properties, which is welcome news to those who intend on doing so.
Firstly, you will need detailed plans for the proposed work. This may involve hiring a surveyor or architect to provide drawings and plans for how your building project will look when completed. They can also help manage the build project.
Look for recommendations of local tradesmen in your area and get a number of full quotes, never go with the first price you are offered. In financial terms, the value of your house will be most likely to increase by the addition of a bigger kitchen (perhaps with a bedroom above?). Also adding extra bedroom space with a loft conversion with en-suite can add value, but it depends on the type of buyers you are hoping to attract, as individual needs will differ.
Somebody will also need to manage the project. Ideally, you should do this as you’ll need to make decisions if anything goes wrong or if the plans needs to be altered,. After all, it is your home! But of course this can be time consuming for large projects, so you may wish to appoint or hire someone to do this for you.
It is important that you check with the builders first if they will be dealing with this, as the last thing you would want is to have your new extension torn down because planning permission was never sought.
If you are managing the project yourself then you may be responsible for obtaining planning consent and adhering to building regulations. If you hire specialists, however, they may be responsible.
Another great way to increase the value of your home is by improving certain rooms, such as adding a new kitchen or updating the bathroom suite. These are the two rooms that buyers home in on, so it is important that they are immaculate when you are trying to sell your home.
There are a number of reasons why a remortgage is a useful way of raising the money you need for your building project. Firstly, you can use the available equity in your property to add value to your home; indeed some lenders will agree a remortgage based on the ‘when finished’ valuation of your property. In addition, remortgage rates are often lower than rates on other types of borrowing. This means you can benefit from a low interest rate not only on your additional borrowing but also on your main mortgage. With interest rates currently at a record low level, remortgaging can help you avoid the need to move home by providing the cash you need to extend or refurbish your current residence.
Howard O’Gollegos writes for Just Commercial Mortgages.com the UK’s No.1 site for the latest commercial mortgage rates and commercial property finance news.