Lots going on in the mortgage world this week
Lots going on in the mortgage world this week so lets get straight into it.
It was positively Spring like over the weekend which was a very welcome change. Hopefully that turn in the weather will be a good sign that BoJo has some good news for us later today? We can hope… 🤞
House Prices hit record highs
Research from the ONS (Office for National Statistics) released last week showed that house prices were up 8.5% across the UK. The highest growth since 2014.
Interestingly, they believe that prices were up the most in the North West (11.2%) but lowest in London (3.5%). As ever, there are big variants even within London, but if that is correct, it does show there is scope for prices to continue to rise in the South East even post any changes to Stamp Duty next month.
That view was backed up by E.Surv, the Surveyors, who believe prices were up 1.2% in January alone.
Updated First Time Buyer page
We have just relaunched the First Time Buyer section of our website, which now includes key info on:
- How much can you borrow?
- How much will it cost?
For that information, along with a video explaining these points and much more, please click on the link below.
Interest Rates likely to remain flat
Gertjan Vlieghe, external member of the Monetary Policy Committee, estimates that the “removal of monetary stimulus is unlikely to become appropriate until well into 2022”.
He added: “In my judgement it would be a policy error to respond to such circumstances with early monetary tightening. Tightening too soon would be a worse mistake than tightening too late, given that monetary policy space for easing is limited. So even if the economy recovers more strongly than in our central projection, I think removal of monetary stimulus is unlikely to become appropriate until well into 2022. Such a strong economic scenario would be a nice problem for the MPC to have. We have all the policy space we need in order to tighten monetary policy. And given low neutral interest rates, is likely we would not have to tighten all that much.”
For his full comments and accompanying data, you can see the link here. But a brief summary in English is that – interest rates are very likely to stay flat until 2022 and possibly longer. If the economy does not improve as expected, interest rates may well go negative before they go up again, but this is an unlikely outcome. It is crucial to note that while the Bank of England may keep their benchmark rate flat, the best mortgage rates may well vary based on capacity and demand which is the current situation.
Cladding has been a major topic since the Grenfell disaster back in 2017. As there have been some recent changes and a lot of effort to help those stuck, we put together this info which may be helpful if you are in that situation or are looking to buy a flat in the near future: Updated Cladding Information
Market Rates continue their upward trajectory in the mortgage world. Mainly pushed up by hopes of an economic bounce back in the second half of this year as the vaccine roll out carries on at pace. No sign the Bank of England will raise rates but with upward pressure on pricing, and very high demand with limited capacity, we could start to see mortgage rates move up from here.
That said, lenders are offering rates at quite a high margin over market rates, (especially where there is a 25% deposit or less) so we still feel keeping your mortgage options short term will save you the money in the long run.
In the last week:
3 Month Sterling Libor = up by 0.010% at 0.059%
2 Year SWAP = up by 0.066% at 0.182%
5 Year SWAP = up by 0.073% to 0.461%
Bank of England Base Rate = Held at 0.10%
2 Year Variable from 1.19%
2 Year Fixed Rates from 1.04%
5 Year Fixed Rates from 1.24%
BTL Rates from 1.19%
The actual rate you will be offered will be dependent on your personal circumstance and deposit level. Please speak to one of our advisers so that they can guide you through this process
Source: Twenty7Tec February 2021
Any questions on the mortgage world or any mortgage goal that you may have? Please do pick up with one of the team who would be delighted to help.
Should you wish to speak to one of our mortage brokers or protection advisers, Click Here and you will find everyone’s contact details.
Your property may be repossessed if you do not keep up repayments on your mortgage.
This firm usually charges a fee for mortgage advice. The amount of the fee will depend upon your circumstances and will be discussed and agreed with you at the earliest opportunity.
Rose Capital Partners Limited is an appointed representative of PRIMIS Mortgage Network, a trading name of Advance Mortgage Funding Limited which is authorised and regulated by the Financial Conduct Authority.