12 April 2018

In January, the average mortgage interest rate was 2.53%. How does that compare to yours?


Some eye watering statistics from The Money Charity this week.  The Charity has reported that total mortgage lending stood at £1.37 trillion at the end of January.  This is up from £1.32 trillion in 2017.  Averaged over the 11.1m households with a mortgage, this equates to £123k per home in January.
The average interest rate was 2.53% at the end of January.  Product offerings now exceed 11,000 across the market and rates start from circa 1%.

There were 24,840 loans approved for house purchase in January, according to UK Finance, 5% lower than a year earlier.  The average loan approved was circa £189k.

This decrease is interesting as it is a common knowledge that owning a home can be cheaper than renting.  The report goes on to suggest that inclusive of all benefits, private renters spent an average of 34% of their income on rental payments.  In comparison, people who owned their home only spent on average 18% of income.

The Ministry of Justice reported that 47 mortgage possession claims were issued every day, throughout quarter four 2017.  31 mortgage possession orders were made every day.  18 properties were repossessed every day.

And just because this caught my eye - Child Poverty Action Groups ‘The Cost of a Child in 2017’ report estimates that couple families now spend £155,142 on raising a child to their 18th birthday - £23.61 a day!  This is up 2.4% compared to last year.

This will go some way towards why the report suggests that around 9.45m (35%) households have no savings, while a further 2.97m (11%) have under £1,500. 

I know, stark figures indeed.  But sometimes we do just need to review what we have, where we are at and how can we change things.   It always surprises me how few people know what rate they are on, the type of mortgage, i.e., fixed rate, tracker rate, etc, and whether they are paying interest only, or capital repayment.  Unsurprisingly, almost everyone knows what it costs per month to the nearest penny! They will haggle for a £10 discount on a new washing machine, or sky TV,  but will stay with the current lender when their ‘promotional rate’ period comes to an end, ‘brush it under the carpet’, and deal with it ‘tomorrow’. But, we all know tomorrow never comes.  A review of what’s on offer from other Lenders could give you a nice surprise and probably a few extra pounds in your pocket!  

05 April 2018

Piazza Italia was superb! Lenders launch in to Near Prime for those with small deposits


This column is always a difficult one to write in the middle of the Easter holidays and whilst a lot of people are away, including myself!  So, whilst writing this from our ski chalet, I do look around the surroundings and weigh up the local house prices and compare to those back home.  We are most definitely an expensive comparison.  With this in mind, I wonder how first time buyers manage to save alone, without the help from the bank of mum and dad or grandparents, in the current climates, most probably still whilst paying to rent a property?  Which incidentally, will be a significant amount more expensive on the monthly payments than a mortgage probably would be!  This is of course on the basis that the clients have no issues, which, as more and more people apply for a mortgage, more and more fall out of the ‘high street’ model.  Some give up, whilst others look for the alternative mediums out there, such as ‘whole of market’ mortgage brokers, who have access to lenders who want to help. 

Lenders recognise that they should be helping those who may have had a blip in the past.  Just last week, our good friends at Kent Reliance (part of the One Savings Bank group), launched a mortgage for those with a 10% deposit, that may have had a default or CCJ over two years ago, or a missed mortgage payment over one year ago, with rates starting from just 3.19%.   Terms and conditions obviously apply, and these deals are only available through a limited few. 
They join another lender, Kensington Mortgages, who also offer a similar offering for those with just a 10% deposit.   However, that means that only two lenders in the whole market will consider someone with a historic blip and just a 10% deposit.   These two lenders must be applauded for leading the way.  But overall, this needs to change and more lenders need to follow suit and offer assistance. 

Finally, hats off to the organisers of the Easter weekends Piazza Italia.  Despite the weather, the crowd turnout was fantastic, as was the entertainment, and it looked like everyone enjoyed themselves.  AToM was delighted to be a sponsor and well done to all involved.