Tag Archives: homes
Mortgage rate savings have been significant in UK over last two years
Fixed rate mortgages in the UK fell to their lowest levels in 2015, whilst the standard variable rate remained static, meaning the potential savings for borrowers have increased. Indeed potential savings have improved significantly by 50% over the course of the past two years, according to the latest research from Halifax. The average interest rate on a new fixed rate mortgage fell a further 0.59over the past 12 months, whilst there was no change in the standard variable rate over the same period. This means that the average fixed rate now stands at 2.66% compared with the average standard variable rate of 4.49%, with the gap between the two widening by 1.81 percentage points since August 2012. As a result the amount homeowners could be saving by switching to a fixed rate deal has increased by 50% in the past two years. In November 2013, the average monthly payment of a home owner who took out a two year fixed rate on a £100,000 mortgage would have been £485. At the same time, the payment on a standard variable rate mortgage would have been £551, a monthly saving of £66. According to the research a borrower taking out a fixed rate in November 2015 would be paying £457 a month on a £100,000 loan compared with £555 on the average standard variable rate, saving of £99 a month and 50% higher than two years’ earlier. ‘With the base rate remaining at record low levels for another year, fixed rate mortgages fell further in 2015. Over the past three years average rates have fallen sharply, significantly widening the gap between them and standard variable rates. As a result, borrowers have been able to make considerable savings,’ said Craig McKinlay, mortgages director at the Halifax. ‘Whilst remortgaging activity has picked up in the last year, this is only in line with new loans. As a result, remortgage activity’s share of all lending has remained relatively subdued, especially when compared to its strength in 2008,’ he explained. ‘Without the concern of a base rate rise in the immediate future it seems borrowers’ appetite to remortgage has been dulled, meaning that some could be missing out on significant savings,’ he added. The research also shows that remortgage activity remains well below the 2008 peak. The widening gap between fixed rates and standard variable rates appears to have helped improve remortgaging’s share of all new mortgage lending from 29% in August 2012 to 32% in November 2015. However, this growth is far slower than that seen in the gap between fixed and variable rates, and demonstrates that remortgaging remains considerably below the peaks of 50% that it reached in 2008. Continue reading
Rental prices up year on year in 11 out of 12 UK regions, latest index shows
Residential rents prices have increased in 11 out of 12 regions in the UK with the South East of England and the East Midlands showing the highest annual rent increases. Overall the average rent in the UK, excluding Greater London, is now £740 per month while in the capital city it is £1,510 per month, according to the latest rental index from HomeLet. Only the North West of England has seen rental prices drop with a fall of 3.4% from £646 per month to £624 per month. However, rent prices for new tenancies in Greater London are rising at the slowest rate for almost two years. The January index data shows Greater London rent prices are 6.2% higher for the three months to January 2016 compared to the same period in 2015, the slowest rate of growth seen in Greater London, the slowest since March 2014. By comparison, rent prices in other regions continue to rise steadily with the South East of England and the East Midlands seeing the highest rent price rises in the three months to January 2016, at 7.2% and 6.8% respectively. Monthly data gives a different picture. Rent prices in the UK, excluding Greater London, were 0.2% higher in the three months to January 2016 than in the three months to December 2015. In Greater London, rent prices have fallen by 0.9% in the three months to January 2016, compared to the previous month. Overall, six out of 12 UK regions have seen rent prices rise in the three months to January 2016 compared to last month, while six have seen prices fall. ‘It’s notable that there has been a further fall in the rate at which average rents in the Greater London area are rising. In recent years, the capital has seen much faster rates of increase than the rest of the country, but it may be that an affordability ceiling has now been reached in London and that rents will now track other parts of the UK more closely,’ said Martin Totty, chief executive officer of the firm’s parent company Barbon Insurance Group. ‘The fact that UK wide average rents in the private rented sector continue to show sustained upwards growth reflects there is still strong demand for rental properties, driven mainly by the impact of the long term structural imbalance in supply and demand of property,’ he pointed out. ‘Landlords achieving higher average rents over time also suggests that tenants starting a new tenancy are proving they can afford higher average rents. With demand outstripping supply, some would-be tenants may be able to outbid rivals for properties, which could drive higher rents,’ he added. Continue reading
Consumer group blasts new second home property tax as dangerous and flawed
The new 3% surcharge on second homes in the UK is dangerously flawed and it could harm the very homeowner that the government wants to help, it is claimed. According to the Home Owners Alliance, a consumer group for home owners, said that while the surcharge is welcome in principle, the way it is going to work is not helpful due to a number of situations which have not been taken into account. In its response to the proposed change due to take effect from 01 April, the HOA says it is so overly complex and flawed that it will lead to massive unintended consequences. ‘It is great the government is trying to use stamp duty to help home owners, but they have made a real hash of it. The ridiculously complex way they are planning to introduce the scheme will end up harming many of the very home owners it is meant to help, and lead to widespread confusion among home buyers,’ said Paula Higgins, HOA chief executive. ‘We are already being contacted by distressed home owners who have worked out they will be caught by it, and not be able to buy the home they want to. Rather than push ahead with a well-intentioned but dangerously flawed scheme, it should go back to the drawing board and put it right,’ she added. In its consultation response, the HOA has suggested many remedies to iron out some of the worst problems with the proposals, but points out that almost none of the problems would exist if the government used the more simple system. ‘It is really simple, no one should pay the stamp duty surcharge if they are going to buy a home to live in, and home owners need confidence that will be the case. However, if you are buying a residential property for any other purpose, you should pay the surcharge,’ said Higgins. The HOA consulted widely with members and other stakeholders, and identified various problems. It pointed out that many ordinary buyers who are not buying a holiday home or one to let out will be hit by the 3% stamp duty surcharge at the last minute, forcing them to give up purchasing their new home. For example, a first time buyer will be charged the stamp duty surcharge if they jointly purchase their home with someone who already owns a property and they could pay more stamp duty than an existing home owner with a major property portfolio. Separating couples could be hit by the surcharge when one of them sets up a new family home and people moving to new build homes where the timetable is dictated by the developer will generally have to pay the stamp duty surcharge, only to reclaim it from the government later. This will particularly hit hard stretched pensioner downshifters moving into newly built retirement homes, says the document. Also, home owners who move for work and rent out their homes… Continue reading
