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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
Survey reveals many British buyers find buying a home confusing and unfair
Some 62% of British people find the UK property buying process confusing and 37% think it is unfair, according to new research. The main reason buyers think it is confusing is the number of expensive and complicated processes they have to go through to buy a new home, the survey from estate agent Tepilo shows. Almost a third, 27%, said the buying process is far too complicated and expensive, 21% think transactions take too long and 14% worry about the risk of a sale falling through prior to exchange when they've already forked out money on legal and survey fees. Out of the 37% who found the buying process unfair 40% said that it could be fairer if once a sale has been agreed it could be made legally binding so no one could pull out, which would help to reduce the worry of losing money spent on legal and survey fees if a sale falls through. A further 35% think bidding above an already accepted offer shouldn't be allowed and almost 31% think that sellers should be responsible for paying for the survey on the house they are selling. When buyers were asked whether they knew the meaning of key house buying terms, the results were surprising, with many not knowing what phrases like conveyancing, EPC and land registry fees mean. Just 41% know what a mortgage in principle is, only 45% know what a homebuyers report is and 48% know what conveyancing means. The survey found that 60% know what the terms exchange of contracts and stamp duty mean, 53% understanding what the land registry fee is and 50% knowing what an EPC is. Some 5% did not know any of these terms. A staggering five per cent of buyers admitted to not knowing what any of the terms meant! Actually moving was stressful for 42%, while 31% said it was deciding how much to offer on a property. Getting a mortgage agreed in principle was stressful for 28% and deciding which solicitor to use by 27%. ‘It's staggering to see just how many people think that buying a house in the UK is complicated and unfair. It shouldn't be this way, as the actual process of buying and selling houses is fairly straight forward if you understand it,’ said Sarah Beeny, owner of Tepilo. ‘However, many estate agents and solicitors benefit from people thinking the process is complicated, as it allows them to charge astronomical fees to look after key elements of transactions on behalf of buyers and sellers,’ she pointed out. ‘To feel more comfortable when buying and selling, I'd advise people to really research the process thoroughly before purchasing a new home or selling an existing one. Gen up on all the steps involved, the average costs for each and all the terms associated with property transactions. That way, you'll feel much more empowered and in control of the process, which will help… Continue reading
Prime London property market sees strong buyer and letting activity at start of 2016
New buyer registrations and tenancy agreements in the prime London residential market have soared from last January, with buyers and renters particularly looking for one bedroom homes. The number of new buyers registering in January 2016 was 24% higher than in the same month in 2015 like for like, according to the latest London property monitor report from estate agents Marsh & Parson. Outer prime London areas are experiencing the highest New Year demand from interested buyers, with Barnes and Bishops Park seeing among the strongest rises in the number of buyers registering locally to buy property, the details also show. However, this sudden surge in demand for Prime London properties is contrasting with a continued shortage of housing stock in the capital. The supply of homes in prime London fell 12% year on year in the last three months of 2015. This has led to intense competition to own a home in the capital, with 13 buyers for every property in prime London at the end of last year. ‘The New Year always tends to bring a resurgence in purchase activity but the figures we’re currently seeing are strong. Private buyers, landlords and other investors are rushing to secure their preferred property before the 01 April Stamp Duty hike,’ said Peter Rollings, chief executive officer of Marsh & Parsons. In the lettings market, increased demand has led to a burst of January activity. The number of tenancies agreed in the first two weeks of 2016 was up 44% compared to the same period in January 2015 on a like for like basis. Prime Central London in particular enjoyed solid lettings growth, as agreed tenancies surged by 91%. The central zone is expected to see faster rental activity in 2016 than it did last year, when a slowdown in corporate lettings resulted in cooler annual rental growth of 0.6%. Meanwhile, outer prime London saw steadier expansion in tenancy agreements of 23% in January 2016 year on year. One bedroom properties are the main drivers of this strong growth in lettings activity and property demand, according to the report. These smaller homes have seen the biggest rise in value of any property type in prime London over the past year, with average prices increasing 3.1% between the fourth quarter of 2014 and the same quarter of 2015, equating to a real term rise in value of £18,417. By contrast, average prime London property prices saw only a 1.7% increase over the same period, across all property types. The typical rental value of one bed lets across prime London has risen by 6% over the course of 2015 from £392 to £415 per week compared to an average of 1.9% across all property types. Within the prime central area, one bedroom lets experienced even faster growth of 7%. ‘Prime London lettings activity has seen strident start of year growth, especially in the prime central area. This can… Continue reading
