Yorkshire Building society launch a market leading fixed rate product.
Yorkshire building society is Britain’s second largest building society and also the ninth largest high street financial services provider.
The building society has recently announced a ‘solid financial performance’ in 2012, their new mortgage lending has increased by 12 per cent to £4.6 million. Read more
Mortgage Rates Fall Below 4 Per Cent for First Time Buyers.
If the mortgage market is to see a bumper 2013 then first time buyers are crucial and therefore lenders need to recognise that they have a crucial role to play.
It seems then that for the first time since before the financial crisis many lenders are now offering first time buyers mortgage rates at below 4 per cent. Read more
Buy to Let Mortgage Rates.
Statistics recently released have revealed that last year £16.4 billion was lent to buy to let investors. This figure was 19 per cent higher than the £13.8 billion advanced in 2011.
These figures do show that there is still continued growth within this particular sector. Read more
The Buy to Let Market.
It seems that given the paltry levels of interest paid to savers in the current financial climate it is no wonder that buy to let has an irresistible financial logic for a growing number of people who have some money to invest.
Therefore rental property appears to remain an attractive source of income for many people.
According to the property search website, Rightmove, the proportion of ‘virgin landlords’ looking to invest for the first time is at its highest level for more than a year.
The number of buy to let mortgage loans has now reached its highest level for four years, latest figures have shown.
In total 136,900 new buy to let loans have been advanced during 2012, which is the highest number seen since 2008.
Nearly 1.5 million investors already hold buy to let mortgages in the UK, industry figures have shown and this also shows how demand for property investment has surged.
According to the Council of Mortgage Lenders (CML) buy to let accounted for 11.5 per cent of total gross mortgage lending in 2012, which was up 9.8 per cent on the year before.
Kristjan Byfield, director of sales and lettings agents Base Property Specialists, says “in much of country, buy to let has become the engine room of the property market as a whole”.
Recent research has also revealed that around 74 per cent of professional landlords are also intending to expand their portfolios in 2013.
Experts suggest that landlords who can demonstrate a strong track record are in a good position to expand their portfolios in the current climate.
Buy to let fixed mortgage rates have recently fallen to levels last seen in 2007. The average buy to let fixed mortgage rate currently stands at 4.69 per cent. Just one year ago it was 5.04 per cent and three years ago it was 5.77 per cent.
Increasing numbers of people are now renting property as they continue to struggle to raise a deposit and get on to the property ladder.
The Council of Mortgage Lenders has suggested that the buy to let market has benefitted from high tenant demand, which is likely to continue for the foreseeable future.
Rising rents in the past few years, which is partly as a result of more priced out first time buyers being forced to rent, have inflated the income landlords can earn.
The latest Census figures show that the proportion of British households renting has increased in the past decade from 31 per cent to 36 per cent.
Jonathan Harris, director of mortgage broker Anderson Harris, said “it is no surprise that the sector continues with its strong performance”.
Rents in Britain have risen dramatically in recent times and so buy to let appears to be a lucrative opportunity.
Paul Smee, director general of the Council of Mortgage Lenders, said “the overall look for the buy to let sector is positive”.
In conclusion it does seem that the UK property market could be on the way to a new buy to let boom.
Old Versus New Properties debate.
According to figures produced by the National House Building Council around 184,329 new homes were built.
Both new properties and older properties generally appeal to very different markets.
Buy to let investors often favour a new build property as the rental returns tend to be higher on them and there is also normally minimal upkeep and maintenance required.
Whereas older properties tend to be the choice of those who do not mind tackling the occasional maintenance issue and those that also do not mind doing a bit of DIY.
Recent data from some estate agents has shown that only one in four potential home buyers would choose a house that has been built within the last 10 years.
Rupert Lister, director at Fulham based INZO estate agents, reveal then that 90 per cent of prospective buyers are still initially looking for period properties.
Research from the Future Homes Commission, showed that one of the reasons many potential buyers would not buy a newly built property is that they do not think that new homes are in anyway built for the needs of a modern family in the way that many Victorian and Edwardian houses were.
A recent report has shown that the size of new homes in the UK is well below that of Ireland, Denmark and Germany.
This said it has lead to many people believing that new builds are simply maximising profit by minimising space.
Old build homes will always be sought after then for their bigger rooms or bigger gardens and also there is more scope to add value to the property by extending.
Some buyer prefer older properties as they have a ‘homely feel’ and they think that new properties on a whole are ‘soulless’. Also the quality of craftsmanship tends to be better in older buildings as standards in general were much higher a 100 years ago than they are today.
New research has also shown that period properties tend to see four times as big increase in house prices as new build homes in the same areas.
On the flip side new builds do hold some charms……for a start they require a lot less if any maintenance and repair and as they are built to higher insulation standards buyers can expect lower heating bills.
Also over the past few years the competition in the new build market has increased considerably and therefore current developers are outdoing each other with their incentive schemes.
These incentives can range from paying the buyers stamp duty, or the legal fees or removal costs.
Piers Banfield, sales and marketing director for Banner homes, believes that the future of housing will see an increase in new build properties, this will then see an increase in competition.
More competition will in turn drive developers to build high quality homes, which then may result in the British public to re-think their attitudes to new builds in general. Out with the old and in with the new!
The Property Market in 2012.
It seems that in terms of levels of home ownership the UK now stands 11out of 17 in the European Union league tables.
However, with interest rates staying low and house prices remaining stagnant it appears that there is a reassuring level of stability in the property world. Read more
Rents Fall but for How Long?
Last year saw soaring rents due to high numbers of would be buyers finding themselves trapped in rental accommodation as they were unable to obtain a mortgage.
Research from housing and homelessness charity Shelter found that year on year annual private rents have risen on average by almost £300. Read more
The Return of the 10 year Fixed Rate Mortgage.
A 10 year fixed rate mortgage in this day and age can sound quite far-fetched, but imagine 5 years from now when rates may have possibly climbed to at least 6 per cent…..
It is not so far-fetched when looking back at the 1990s when many borrowers had mortgage rates of 9 per cent to 15 per cent.
A 10 year fixed mortgage rate product is a rare commodity within the current mortgage market.
The most recent lender to enter back in to the 10 year fixed rate mortgage market is Norwich and Peterborough building society, who have re-launched their 10 year fixed year mortgage which has a rate of just 3.99 per cent.
The mortgage has a 75 per cent loan to value ratio, it comes with a fee of just £295 and the building society is also offering free valuation or free legal fees. Those home owners looking to remortgage to this deal will be given a range of cash back options.
Richard Barker, product manager at Norwich and Peterborough building society, says “we know that this competitive rate will be welcome news for those who wish to fix for a longer period of time”.
David Hollingworth, director of mortgage broker London and Country, added “it is certainly a market leader in a sparsely populated sector of the market and will give long term security against rate rises”.
This particular deal is identical to an offer the building society had the same time last year, which was then pulled from the market after just two weeks following ‘unprecedented demand’.
The Leeds building society has also launched a 10 year fixed deal at a rate of 4.29 per cent and also has a 75 per cent loan to value.
This deal comes with a booking fee of £199 which is payable on application, which is non refundable, and a completion fee of £800 for loans up to £500,000.
A greater level of financial stability is one major reason to consider a 10 year fixed rate mortgage and it also ensures that the mortgage rate and repayments remain constant, even if a borrowers life changes in other ways.
Industry experts also state that by choosing a competitive longer term fixed rate borrowers will not be required to remortgage so often which can save on remortgage fees and charges.
These mortgage deals are better suited to those who feel they are in their ‘home for life’ and unlikely to move, although the deals are portable and so can be taken to a new property.
One of the downsizes to these mortgages is that an early repayment charge is applicable all the way through the term of the mortgage.
A lot can happen in 10 years and most people will not know what they will be doing in 2023 and it is also impossible to know what will happen to the economy. Therefore these deals are not for everyone.