7 November 2017

Press Coverage

Millions of borrowers on their lender’s standard variable rate will pay a total of nearly £1bn a year more in interest if Bank rate rises by just one quarter of a percentage point. Mark Harris of mortgage broker SPF Private Clients, says: ‘Borrowers often don’t remortgage until rates actually start rising, as higher monthly mortgage payments really focus the mind. Of course, by that time fixed-rate mortgages tend to be a lot more expensive. So anyone in the market for a new deal may be wise to fix now, while there are still some excellent deals available.’ The Sunday Times, 22 October 2017

A Bank of England base rate rise in November is almost certain but borrowers don’t necessarily need to panic. Mark Harris of SPF Private Clients says banks still have ample liquidity to lend and deals can be found. ‘Metro Bank this week reduced its five-year fixed rate for up to 90 per cent loan-to-value by ten basis points to 2.54 per cent. It is not dissimilar to a domino effect – as one lender raises rates, others follow to ensure their service levels are not compromised if they are inundated with business. Borrowers in the market for a fixed-rate mortgage would do well not to delay.’ The Times, 28 October 2017

It’s crunch time for anyone thinking about switching to a new mortgage after several lenders raised their rates. Mark Harris of SPF Private Clients, says: ‘HSBC hopes to hold rates for another week at least, and Santander for another two…. But both have indicated that should service levels begin to suffer they may be forced to move sooner rather than later and raise rates.’ The Guardian, 13 October 2017

Halifax’s latest house price index shows that while quarterly and annual rates of house price growth have improved, they are still lower than the start of the year. Mark Harris of SPF Private Clients, says: ‘The housing market shows no signs of faltering, despite the ongoing Brexit saga and hints from the Bank of England that interest rates will need to rise sooner rather than later.’ The Daily Telegraph, 6 October 2017

Is it worth paying back a Help to Buy equity loan early? Eve Morgan, a Help to Buy specialist at SPF Private Clients, says: ‘Although there is no interest to pay on the equity loan in the first five years, it does track the property value and will increase if the value of the property goes up, eating into potential profits. The minimum repayment is 10 per cent of the value so if you don’t have this much, you will need to bide your time anyway until your savings reach that level. If the base rate rises further, it will make it more appealing to keep the money in savings.’ The Times, 21 October 2017

Although interest rates remain at a historically low level, with the latest rate rise could we be seeing the start of a new, upward trend? Salini Bundhoo, a financial planner at SPF Private Clients, says it’s time to start thinking of saving for a rainy day. ‘Otherwise they may find that they will have to cut their spending to accommodate the higher borrowing costs.’ The Times, 2 November 2017

The Bank of Mum and Dad is lending more money than ever to their children, with most parents admitting that they don’t expect to see their money again. Mark Harris of SPF Private Clients, says: ‘As incomes fail to keep pace with house-price growth and many first-time buyers carry significant debt from university while having to pay ever-rising rents, saving up for a deposit to buy a home is harder than ever. The Bank of Mum and Dad is increasingly being called upon to gift ever greater sums of money to help first-time buyers onto the housing ladder. However, it is crucial that parents don’t gift money that they will need back at some stage as it is highly unlikely that their offspring will ever be in a position to repay it.’ Mail Online, 27 October 2017

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