Tag Archives: investments
Research shows just 18% of UK mortgage holders overpay to reduce their loan
Mortgage holders in the UK could save over £1,800 in interest alone through regular overpayments, according to new research. Some 18% overpay on their mortgage every time a payment is due and 11% have even delayed buying a new car to make the extra payment, however 58% never overpay. Overall UK mortgage holders could save over £14 billion over the next two decades by regularly overpaying, the research from Comparethemarket shows. Overpaying each month by as little as £59, or around 10% of an average monthly payment, means mortgage holders could reduce their mortgage term by approximately one year and four months and possibly save £1,842 on interest alone. For first time buyers the potential savings are even greater. Mortgage holders between 25 and 34 years old could reduce their mortgage term by approximately two years and eight months and save roughly £6,553 on interest by overpaying by 10%. Many home owners are already aware of the benefits of overpayment. The survey found that 52% said that contributing more towards their mortgage each month would make them feel more financially secure, with 19% agreeing that it would make them feel much more secure. Those who do regularly contribute extra to their mortgage overpay by an average of 4.7%. Nearly a fifth said that they overpay every time a payment is due and 15% admitted to overpaying by more than 10% in the last 12 months. Many mortgage holders are willing to give up day to day luxuries in order to afford overpayments. To pay off more of their mortgage, over one in ten people delayed buying a new car, 18% had not taken a holiday abroad and over a fifth put off buying a luxury item such as expensive clothes or a new gadget such as an iPad. However the majority of people still hesitate to put more money towards their mortgage every month, with 58% admitting to never overpaying. Of those who don’t overpay, a fifth think they have too many other outgoings such as household bills, and one in 10 were not aware they could overpay on their mortgage or thought it seemed too complicated. Of those who do not overpay, 44% thought they couldn’t afford the extra payments, yet respondents also said they spent on average £167 each month on non-necessity items, with nearly one in 10 admitting to more than £300. The research also shows that 25 to 34 year olds admitted to spending closer to £210 on luxuries such as going out for dinner or attending the theatre. ‘As a nation we are getting more proactive in searching for the best deals, whether on energy providers or insurance. Whilst committing more of your pay cheque towards your mortgage can seem financially daunting, making small contributions each month, or even a one-off lump sum overpayment, could save mortgage holders thousands of pounds in the long term,’ said Jody Baker, head of money at the comparison website. ‘Sacrificing one meal… Continue reading
Rents still rising across most of UK but growth is slowing
Average residential rents in the UK continued to rise in July with demand still more than supply but the rate of growth is slowing, the latest index data shows. Excluding Greater London the average rent agreed is now £779 per month, some 2.3% higher than a year ago while the average rent in London is now £1,599 per month, up 4% over the year. The growth has continued since the beginning of the year and the outlook remains strong despite the growth slowing, says the rental index report from HomeLet. The data suggests that landlords have been able to continue securing higher rents on new tenancies despite the economic uncertainties created by the UK’s vote to leave the European Union in June. It mirrors data from the housing market, with mortgage lenders also reporting modest growth in house prices in the month following the Brexit vote although many agree that is still too early to measure what affect Brexit sentiment has had on the market. Looking forward, the fundamental forces in the private rental sector remain unchanged, the report suggests with Britain’s growing population, the relative unaffordability of house prices, and the lack of new homes being built combined with the reduction in social housing suggest that the private rental sector will continue to be an ever important source of homes in the years and decades to come. A breakdown of the figures show that there is considerable regional variation recorded by the index. Month on month rents increased the most in East Anglia with a rise of 3.7% and the region also topped the annual growth with a year on year rise of 9.7%, taking the average to £897. But rents fell by 3.7% month on month in Scotland but are up 1.4% year on year to an average of £676. The only other region to see a month on month fall was the North East with a decline of 0.4% to £537 and a year on year fall of 5%. Year on year rents have fallen in the South West by 2.1% but are up by 0.7% month on month to £894 and by 0.5% in the North West to £660 but the region has seen month on month growth of 0.5%. Ultimately, rents will be determined by supply and demand in the private rental sector, according to Martin Totty, chief executive officer of HomeLet’s parent company Barbon Insurance Group. ‘Population growth will continue to increase demand, and that the housing stock isn’t growing quickly enough to meet that demand. However, with rents ultimately limited to a tenant’s ability to pay, rents are likely to continue to climb, albeit at the slowing pace noted most recently,’ he said. ‘We won’t know exactly how Brexit is impacting the private rental sector and it will be several months yet until we see some clearly established trends in the marketplace. It seems likely that with lenders concerned about the prospect… Continue reading
Demand continues to fall in prime central London property market
Although the wider UK property market is yet to suffer any detrimental impact from Brexit, London’s prime market is seeing demand continue to fall, the latest index suggests. In the £1 million plus sector in London demand has fallen by 10%, the lowest level on record and a further drop since demand cooled following April’s changes to stamp duty for buy to let and second homes purchases. The data from the prime central London property index from hybrid estate agent eMoov shows that the five areas where demand is at its lowest are Mayfair at 3%, St Johns Wood, Knightsbridge and Belgravia all at 4% and Fitzrovia at 5%. The index, which records the change in supply and demand for property above £1 million by monitoring the total number of properties sold in comparison to those on sale, shows that some 75% of London’s most prestigious locations have seen demand remain static or drop since the second quarter of the year. Indeed, the only places to have seen a positive uplift in demand for property over the last three months are Holland Park at 44%, Marylebone at 38%, Notting Hill at 17% and Primrose Hill at 9%. Notting Hill is also fourth hottest where demand levels are concerned, currently at 14%. With Belsize Park enjoying the highest demand across the prime central London sector at 18%, followed by Islington at 17%, Chiswick at 15% and Holland Park at 13%. According to Russell Quirk, eMoov chief executive officer this slowdown was always likely to happen as these areas of London rely heavily on high end foreign investment and second home visitors to survive. ‘Whilst the rest of the UK market seems to be ticking along with little impact as of yet, the immediate weakening of the sterling and negative response from the rest of the EU seems to have had an instantaneous knock-on effect on the prime central London market,’ he said. Continue reading
