25 May 2018

Press coverage

First-time buyers took on £5.1 billion of new lending in March, according to UK Finance. ‘First-time buyer numbers continue to edge up, which is encouraging, although it is a modest increase,’ says Mark Harris of SPF Private Clients. ‘With lenders continuing to offer great rates at high loan-to-values, we would hope to see a continued increase in first-time buyers jumping on the property ladder.’ The Times, 17 May 2018

The Bank of England held interest rates at 0.5 per cent in May, despite speculation that they would rise. But borrowers should not worry because even if they rise several times this year, they are unlikely to rise to the ‘old norm’ of five per cent, explains Mark Harris of SPF Private Clients. ‘The expectation is that they will settle around two per cent,’ he says. ‘The economy is still in tentative recovery mode and Brexit is another uncertainty on the horizon so I would be very surprised if we saw many interest rate rises.’ The Evening Standard, 10 May 2018

Halifax figures show the market fell in April. Mark Harris of SPF Private Clients, says: ‘If you are buying a home, the price at which you purchase is not hugely important in the scheme of things. During your ownership of the property, prices may rise and fall, but as a long-term investment the trend has always been positive, and it is more than an investment, it is a home.’ The Guardian, 12 May 2018

Mortgage bills have become more affordable, with typical payments coming in at just 29 per cent of a homeowner’s disposable income. However, Mark Harris of SPF Private Clients, warns: ‘There is no room for complacency. Talk is of another interest rate rise, perhaps as soon as next month, so borrowers who would struggle to pay their mortgage were rates to rise should consider fixing. The Independent, 18 April 2018

The Post Office has launched the Family Link mortgage, allowing first-time buyers to use the home of a parent as collateral against their own purchase. Mark Harris of SPF Private Clients, said that a similar product at a lower rate is available from Family Building Society, although this requires a 5pc cash deposit from the borrower. He added: ‘Although the Post Office offering appears expensive compared with the Barclays Springboard and Family Building Society products, it is offering higher loan-to-values than Family Building Society, and the Barclays deal is only available over three years instead of five.’ The Daily Telegraph, 11 April 2018

Homeowners are choosing longer fixed-rate mortgages. However, don’t assume you will be able to port your mortgage should you move during a fixed-rate period. Mark Harris of SPF Private Clients, said: ‘There is no guarantee that this will be allowed so don’t fix for longer than you are absolutely sure about, even if it is a tempting rate. A first-time buyer clubbing together and buying with friends may be unwise to take out a ten-year fix, but it might be a more realistic proposition for a family with a couple of children settled in school.’ The Times, 7 April 2018

Remortgaging is on the rise, ahead of a potential interest rate rise next month. Some borrowers on fixed rates are wondering whether they should pay the early repayment charge and remortgage onto another deal. Mark Harris of SPF Private Clients, says: ‘It may be worth doing, but you have some calculations to do first. Work out the total cost of switching, including the ERC and any exit fee on your existing deal, plus additional fees for the new mortgage – some have free valuation and legal fees, but others do not. Then work out how much you would save on a monthly basis on the new rate.’ The Sunday Times, 8 April 2018

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