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Remortgages looking a bit dismal towards the end of this week

[ Posted June 27th, 2011 ]

The major brunt of mortgage activity within the market for the past few months has been focused on homeowners switching their tracker mortgages to fixed mortgages in an attempt to beat the increase expected in monthly payments when the base interest rate increases.  However, while the market has been prime for remortgages with many top lending institutes offering great deals and low rates to entice consumers their way, in the last few days of this week the banks are starting to change their tune it would seem.

For the second day in a row now, mortgage rates actually increased at many of the top lending agents across the nation signalling perhaps that now the banks are starting to prepare for an increase in the interest rate as well.  The average 30 year fixed rate has jumped up to 4.6% with an attached APR of 4.841% which is about .5% higher than it has been.  Also on the increase are interest rates for twenty year mortgages and the most popular 15 year fixed mortgage options.  While this may be dismal news for those who still need to switch their mortgage over, the increase has been very slight in most cases although it has jumped a bit over both of the past two days.

Unsurprisingly, tracker mortgage loans that have the potential to be remortgaged have also increased a bit with the average five year mortgage rate sitting at about 3.1% and the average ten year tracker rate sitting at 4.1%.  Once again, the changes in the mortgage rates are low for these offerings, but it is likely that as the interest rate increase looms closer and closer that the rates will continue to increase to prepare the market for the sudden jump.

However, this does not mean necessarily that you should rethink remortgaging your home if you are worried about getting to completion before the interest rate jumps due to the fact that most experts do not expect the interest rate to jump until the start of 2012.  Therefore, while the rates may inch up a bit over the next few months, they are still much better comparatively then they will be once the increase occurs making now still the prime time to take advantage of the banking institutes refinance deals on fixed mortgages.

Remortgages may finally slow down until next year

[ Posted June 23rd, 2011 ]

The mortgage advice Bureau stated this week that despite the amount of  mortgage activity seen as people rushed to changed their tracker mortgages into fixed mortgages before the base rate changed it is likely that for the time being mortgage loaning will now level off until next year swings around.  Contributing to the lull in the market may have been the fact that the Royal Weddings and bank holidays have been during the same months and the fact that the first quarter of this year was very weak lessening the recovery efforts of this year.

MAB member, Brian Murphy, stated that the Council of Mortgage Lenders believes that mortgage activity was halted during April because of the Royal Wedding and the fact that there were a handful of bank holidays which could decrease the amount of mortgage completions that are registered over the course of the next quarter. Murphy added that even though mortgage activity is still at low levels historically, during the first half of June and for most of May the amount of people seeking fixed mortgages helped it shoot back up to normal levels excluding the low performance of the market during April.

He continued to explain that even though remortgage activity is higher than it was during 2010, it has finally reached a plateau that is still lower then it normally would before the economic crisis.  He added that with the threat of the interest rate rise and the subsequent mortgage rate increase it is very likely that the mortgage market will stay where it is at for the rest of the year.  Murphy did comment that although many people are in fear of the change, the fact that the May inflation data was the same as April indicates that the Bank of England most likely will not hike the rate just yet.

The CML strongly believes that the brunt of remortgage activity has been a result of the expected base rate as it saw the amount of remortgages drop down by almost ten thousand between the months of March and April.  The mortgage group expects to see the same low mortgage activity across the board from home mortgages to even the commercial mortgage market as most people are now waiting to see what will happen when the base rate increases.

How to Sell Property in a Difficult Market

[ Posted June 22nd, 2011 ]

 The current housing market is still far from booming, but despite the dreary conditions of a difficult market, you have the ability to sell your house if you think creatively enough. Everything can change in an instant if you know what to do to sell your property.

 When it comes to selling property you should consider all the selling and marketing options. With the majority of people in the UK choosing to sell property through an estate agent, you may be surprised that there are many alternative successful ways to sell a property which in difficult market could make all the difference.

For instance, you may find it prudent to look into the cost of sale. Selling with an estate agent will cost you anything between 1 percent and 3 percent in commission fees when you come to completion. In a difficult property market you may have to sell your property slightly cheaper than you may have wanted to. However, as we will describe below, there are some alternative methods to sell your property some of which do not incur the significant extra costs of the estate agents commission fees and may help you find the buyer you are looking for.

 Online Property Auctions

 Consider online property auctions. Online property auctions are rapidly increasing in popularity and have the obvious advantage that bidders do not have to physically be in the house to place a bid.  

 If you are in a hurry to sell your property, then the great thing about an auction is that once you have accepted an offer the sale has to complete within twenty working days. However, it is always advisable to set a limit price on your property as otherwise it will be sold to the highest bidder.

 Online Estate Agents

 Search for online estate agents and you will find a number of professional companies that will market your property for a fixed fee. Typically you will be charged around £350 and your property will be advertised on Rightmove and the UK’s other main property portals. The catch is that you have to show the potential buyers round the property and be take a more direct involvement in the sale negotiation.

 If you’re not afraid to get stuck in, online estate agents are well worth it.

 Traditional Auctions

Like online auctions, traditional auctions are a quick and relatively straight forward way to sell your property. You will pay a commission but the advantage is if you are in a rush to sell your property an auction will guarantee the sale. Traditional actions are still the most popular method and still attract serious bidders a lot of which may be cash buyers so are likely to complete quickly. 

 So these are a few alternative ways you may want to consider if you’re struggling to sell your property though the traditional estate agent route. They’re nearly all cheaper than a traditional estate agent so if you need to lower your price, or your estate agent isn’t finding the right buyer then perhaps one of these methods is the answer.

Generation Rent is adding fuel under buy to let investments

[ Posted June 15th, 2011 ]

With housing prices continuing to drop, mortgage deals becoming more affordable, and the average rent on the rise, many investors are now looking at rental property as a great way to make some extra cash.  In fact, due to the low buy to let mortgage rates and the promise of increase in house prices in the future as they are practically at rock bottom now, the prospects of buy to let mortgages are now looking better than they were before.  Add in the fact that this generation is now being coined as Generation Rent, and you have a wide open market to explore if you have the capital to invest in a buy to let mortgage.

In fact, already brokers, mortgage lenders, and estate agents are already stating that there has been a large amount of activity in the buy to let mortgage investment market as smart investors are starting to take advantage of the increase in renters who cannot get approved for their own home mortgages due potential to poor credit problems or a lack of the needed deposit.  Confusion over the potential for an increase in the mortgage rate has also led many to back away from investing in a mortgage instead choosing to play it safe and rent.

At the moment, the average amount of a return on a buy to let return is 10% or even more depending on the market without counting the increase in house prices that make the investment worthwhile in terms of long haul investment activity.  However, heavy deposits are still required in order to invest in a buy to let mortgage making this type of investment only practical for a select few.  It is also important to look at the right areas as not all homes and regions are set up for a high demand of rental properties.

Outside of rental tenants, the buy to let market is also doing well in the commercial sector as many small businesses are finding it impossible to get approved for a commercial mortgage and are forced to rent space.  This type of investment often carries with it a larger return as the shortage in available office space due to stalled construction projects has led to high rental prices for most commercial spaces leading to a quick short term payoff in most cases.

Forum of Private Business suggests using a commercial mortgage to fund small business growth

[ Posted June 14th, 2011 ]

May housing market looking up

[ Posted June 4th, 2011 ]

The housing market has started to gain back some of the ground that it lost over the month of April as property purchases and mortgages looked more optimistically for the May period according to preliminary reports from Agency Express, a national firm composed of board erectors.  The group reported that the number of homes that were sold increased by about 5% compared to April’s figures even though this figure is still two percent lower than it was last year in May.  However, most of the sales seemed to be geographically defined as the best mortgage rates changed by region impacting the amount of overall home mortgages that were signed.

The North of England saw the most recovery in the mortgage market followed closely behind by the Midlands.  This area combined to make up the North-East saw increase in house sales of about 17% inching it just above the North-West area which saw about an increase of 16.5%.  Central England and Yorkshire also saw an increase in monthly home sales over the month of May that totaled to be about 10%.  This was positive news considering the fact that the so-called generation of renters is demanding the headlines in the press at the moment.

Managing director for Agency Express, Stephen Watson, stated that May of last year turned out to be the peak for the home sales market, so analysts are looking to the next month of yearly sales to see if the upward trend will be sustainable.  Despite the slight increase in home sales that occurred over the month of May, house sales for the entire first two quarters of 2011 are still down due to the fact that the first quarter of the year was depressed and below what analysts predicted.

Part of the reason for this depression is the fact that many people are concentrated on securing fixed mortgages for homes they already own due to the increase in mortgage rates that is expected to occur sometime in the next six months.  AS the threat of the bank interest rate continues to grow closer most people are concerned that mortgage payments will be too high to be affordable leading many people towards renting instead of purchasing.  This is likely to have an impact on the remaining two quarters of the year and could erase the growth that was exhibited over the month of May.

Increase in first time buyers is opening the buy to let mortgage market

[ Posted June 4th, 2011 ]

Many experts are now predicting that Britain will become a land of renters, which is good news for those who can afford the current buy to let mortgage rates because the demand for these properties is going to increase as they become solid investments.  As more young people find that they cannot meet the high deposits or credit requirements of a home mortgage the demand for more rental properties will continue to grow making rental mortgages even more attractive to investors with some spare cash and interest in a long term return.

Landlords that already have a great mortgage rate are taking full advantage of the high demand in rentals by increasing their rents driving up the price of renting properties which can hurt the average twenty to thirty year old property seeker.  Due to the fact that purchasing a home is now out the question for many first time home buyers, turning to a rental property with inflated rental prices is not a great option either.  However, Rightmove the property website predicts that so long as pricing power stays with landlords, tenants will need to budget for continual increases.

Tenants themselves are not very hopeful about the shape of the rental market with almost 50% of all tenants predicting that their rents are going to increase over the next year with one in seven fearing that rental inflation will increase by more than ten percent over the next year on year period.  At an average of £700 a month for rental properties, this would mean an additional £70 per month will need to be added to budgets for rent and figures will only increase in higher end city areas.

Although the outlook is not great for renters, many investors are now investigating the best mortgage rates that they can get with 46% of all new landlords stating that this is their first attempt to invest in property but with the sharp increases in rents the temptation is too hard to avoid.  Rents in London alone are the highest in the UK and have still seen a 6% increase in just six months according to figures from Jones Lang LaSalle.  Head of development and investment for the firm, James Thomas, stated that as the market is undersupplied with rental stock for young people who cannot afford mortgages renting is only expected to increase in popularity as both an option and a profitable investment for those who can. aims to provide every client with cheap, affordable and best mortgage loans in the UK market, however the actual mortgage rate available will depend on client's financial circumstances and credit history. Although, has made every effort to ensure that the mortgage rates listed are correct, it bears no responsibility in case of an error. 
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