First Time Buyers are active.

10/7/09 - The French Market brought some colour and a different shape to the Carfax during last weekend. It reminded me just how much we are inexorably linked with our European cousins and, in the mortgage market, this is very noticeable. Members of European states are entitled to borrow money from mortgage companies in UK in the same way and on the same terms as we can. Like us they must prove ability and intent to repay and then, subject to underwriting and due diligence, can take a mortgage on a property here. We have the same rights in European countries too, although it is fair to say that some do not really promote home ownership in the same way as us, preferring rental or long standing family home use. Anyway, it was good to see the colours and hear the Galic language whilst also enjoying sweltering Mediterranean temperatures!
Nearer home, fixed rates on mortgages are rising. Lenders are withdrawing some product ranges and, in some cases, dropping out of the investment (buy to let) market altogether. Is this a sign that there is a gathering nervousness at the welter of rental properties and concern at how they will fare if there are so many that they may soon outweigh the number of possible tenants? If this were to be the case then rental values will decrease and we will enter another cycle of downturn in the sector. Lets hope not!
First time buyers seem to be very active and we have seen a definite upturn in recent weeks. Mostly, 90% is the maximum available to them and rates swing wildly from the mid 3%'s (if you can get the lender to say yes) to the early 7%'s, the latter for five year fixed rates. This may not be such a bad deal as it sounds if interest rates do start to rise anytime soon.