Worried About Turmoil In The Market?

Hi! Steve here!

It would be hard not to notice the turmoil with Mortgage Products this last week or so. Products being lifted, rates increasing noticeably etc. Also, evidence of house price declines and the future of house builders holding clear uncertainty.

On the positive side... there is a clear pent-up demand for houses, unemployment (a key indicator of potential house price decline) remains low, construction cost inflation appears to be stabilising and good developments are selling well.

A good indicator to look at is on the Development Finance side. This is the money lent out for building houses...

What we are seeing here are lenders continuing to lend for both Bridging Finance to secure sites and the Development Finance to build out. Most lenders are just as flexible with their lending criteria and their pricing on fees and interest rates hasn’t changed a great deal!

Although the planning process is still very cumbersome and has actually extended over the last couple of years, we are seeing plenty of sites where planning gains are being made (where an increased number of properties within the development has been agreed).?

On the mortgage rate side of things, a bit like last October, lenders have reacted with uncertainty in mind and so we are seeing rates hiked by larger increments than you might expect. This is likely to be temporary and there may well be a settling down over the next few months. Rather than lock into a higher 5 year fixed rate for longer, if your deal is coming to an end or you are about to take on a new mortgage, it could be prudent to go for a short term tracker or 2 year fixed to get you through this phase of the economy, then opt for longer term stability when the base rate settles down. There are no guarantees of course and this is on the proviso that inflation comes down to what is predicted and interest rates follow suit.?

You may have noticed that the PM refused to consider a Mortgage Protection Fund, which is designed to help households out with the rising costs of mortgage payments. The top priority being to bring inflation down. There is still the Mortgage Guarantee Scheme for First Time Buyers and the support of the Mortgage Interest Scheme he said.?

Even if the government did set up a Mortgage Guarantee Scheme, borrowers would still have to repay the money at a later date. Many lenders offer a payment holiday for up to six months or borrowers could stretch the term to bring down monthly repayments. For those on capital and repayment mortgages, switching temporarily to interest-only or part and part offers some respite.?

It must be pointed out that banks need to lend money. They can be very creative at times to help customers obtain what they’re after. This could be by offering a higher loan to value, adding the cost of borrowing more onto the product fee, rather than just the interest rate or they may offer greater flexibility with the term of the mortgage.?

On the plus side, this British weather has been more than welcomed, rather like Lockdown 1.

Who needs the Spanish sun when you’ve got this, eh?!

If you have any concerns about the above, please get in touch with the team here?and we can assess your situation and talk through the best options for you.

Bye for now.??

Steve

Express Mortgages is a trade name of Express Mortgage Services Ltd. Express Mortgage Services Ltd is authorised and regulated by the Financial Conduct Authority. [Reg No: 474427] Company registered in England & Wales no. 05167662

Your home may be repossessed if you do not keep up repayments on your mortgage.?Some types of buy to let mortgages are not regulated by the FCA.