22 December 2021

Recent Press Coverage

UK house prices have returned to double-digit percentage growth, according to Nationwide building society. Mark Harris of SPF Private Clients, said: ‘While the froth has gone, there is still plenty of activity as this will be the busiest year for the housing market since 2007 in terms of number of transactions.’ The Evening Standard, 1 December 2021

Funding a child’s home purchase is a common financial goal but giving away a lump sum may be a luxury that is neither possible nor advisable. ‘Banks have recognised this, launching a number of specialist schemes to help parents who wish to assist their children,’ said Mark Harris of SPF Private Clients. ‘Those such as the family springboard mortgage with Barclays use parents’ savings to offset the bank’s risks. So, for example, a five per cent deposit effectively becomes a 25 per cent deposit case as far as the lender is concerned. Parents effectively ‘loan’ their savings for a period of time, getting them back at a later date with interest. They are able to do their bit but are not left out of pocket.’ The Daily Telegraph, 6 December 2021

Home loans for first-time buyers are their cheapest in at least a decade, according to Moneyfacts. Mark Harris of SPF Private Clients said: ‘Five per cent deposit mortgages are cheaper now than they have been in a long time, even though the general trend on pricing for mortgages with big deposits is upwards. The latter have been very aggressively priced in recent months as lenders have competed for business. Lenders haven’t been so aggressive on pricing [low-deposit] products, partly because of the lack of competition as they haven’t been keen to lend low-deposit mortgages. If they want to cut rates a bit more, they can, and still make a profit.’ This is Money, 7 December 2021

Many first-time buyers who are finding it hard to get on the housing ladder at home are turning to buying property abroad but it’s not necessarily that easy. Miranda John of SPF Private Clients said: ‘When buying property abroad, it can be tricky for first-time buyers as loan-to-values (LTVs) are not that high. Most lenders will advance up to a maximum of 50 to 70 per cent LTV, while in France it is only possible to borrow a maximum of 80 per cent, meaning you will need a sizeable deposit, thus making it more difficult to save.’ Metro, 7 December 2021

The Bank of England is considering relaxing lending rules for buyers by softening affordability checks as part of a review. Mark Harris of SPF Private Clients said: ‘It doesn’t deal with deposit sizes but it [relaxing interest rate stress tests] is a step in the right direction. However, any changes in regulation must be done slowly to avoid a boom-and-bust situation.’ The Evening Standard, 8 December 2021

The average UK house price fell by £3,000 in October after reaching a record high the previous month, according to the Office for National Statistics. Mark Harris of SPF Private Clients said: ‘With inflation soaring to a ten-year high, the pressure on the Bank to raise rates has notched up another level. However, historically the Committee rarely makes its move and raises rates in December, so the February meeting is a more likely option. This will also give the Bank time to see what impact the Omicron variant is having on economic activity. Mortgage rates remain extremely competitively priced, with lenders keen to lend. If the Bank of England relaxes the stress test, this will enable more first-time buyers to realise their home ownership dream, which will help the rest of the market function more effectively.’ This is Money, 15 December 2021

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