Blog
In this Blog I will raise ideas and issues about the mortgage market, what's happening now and what might be happening in the near future. All thoughts and ideas in the blog are not to be treated as fact and should in no way make up the basis of any decisions to buy, rent, sell or take out any sort of mortgage!
12/05/2008
Well. After 8 months or so the Credit Crunch is finally showing signs of easing. Isn't it?
Not if you're an estate agent around Wetherby where sales are very slow indeed compared to this time last year. And we hear that across the country one in three estage agencies are going out of business. If you look at the mortgage deals around, it's no wonder!
The problem is that there is just no money to lend. And what is available is very expensive.
The inter-bank lending rate is still over 6% and the government's efforts to ease the liquidity crisis is taking its time and, in my opinion, is too little too late. Meanwhile two of the biggest lenders, HBOS and RBS are raising funds from their shareholders - others may well follow suit.
Until the banks have some money to lend it's going to be a tough for the estate agencies - and mortgage advisers!
If you add all this to the media hype around property price falls and its no wonder the property market is somewhat gloomy at present.
It won't be long before the confidence in the housing market returns which it will at some point (we like to own our own home/people realise that over the long term property is a good investment/there is still a fundamental shortage of supply) and there is money to lend (government help/rights issues/savers etc.) and when it does, the estate agents will be back and rubbing their hands together!
11/06/2008
Talk about from bad to worse! Over the last month we've been bombarded with bad news about property falls, rising inflation, global economic slowdown and today we've had news that unemployment is on the rise. Without wanting to sound too negative, the outlook is looking rather bleak!
The big question for everyone involved in property in the UK (which you could suggest is just about everyone in the UK) is: "when is it going to end?" Unfortunately i dont have a crystal ball and for that matter noone can say for sure. What is obvious is that with so many issues, both in the UK and globally, it's going to take some time.
Confidence needs reasons to change and it doesn't change overnight.
So what do you do about it?
The most important thing to do is save, save and save some more. Preparing for hard times is so important and it has to start today. Before saving, make sure all expensive unsecured debts (such as credit cards) are cleared. Then you can start to save.
Analyse monthly outgoings and reduce whereever possible, which can be as simple as switching gas suppliers but it can be taken further for example by paying for services by direct debit and you could also cancel unnecessary services such as sky sports.
Write down where all the money has been spent over the course of a month and look at areas to cut down. Commit to saving a certain amount each month and put it somewhere safe, but accessible - a cash ISA is often a good, liquid and tax effieient place.
Start now and it will pay dividends later - litterally!
04/07/2008
Independence day in the US - and it could be a time to celebrate in the UK!
I've been asked several times this week by first time buyers; "when is it time to buy" and the answer is quite simple, whenever you find the right property at the right price. Despite forecasts by several of the banks/building society's that property is due to fall around 10% this year and the same next year, we're already seeing properties being sold at prices which factor this in - mainly due to distressed/essential sales and a gross under-supply of buyers.
For example, a client this week has agreed a price on a property at £224,000. The property has been on the market for almost 9months, it was originally on the market at £279,950, and it dropped to £249,950 a month ago.
No one can accurately predict how prices will go over the next few years, but if you find the right property at a price you are comfortable with, and are not looking to make a fast buck, then now might be the time to to buy.
Current swap rates make borrowing money on a mortgage quite expensive at the moment, but if you can afford to take the mortgage, perhaps starting on a slightly longer term than you would normally like to in order to reduce the monthly repayments, then there are plenty of mortgages available. We even saw the return of the 100% mortgage back to the market recently, albeit on a guarantor basis.
More and more over the next few months, certain property prices will tumble and anyone looking to grab a bargain should be on the look-out!
05/08/2008
Some good news at last - even for Northern Rock* if you look past the headline of "worse than expected losses for the first half!"
The element of competition seems to be back in the mortgage market with new rates being released on a day by day basis - and getting lower! Swap rates have been on the decline and finally lenders seem to be passing on the discounts to the public with lower interest rates and more choice of mortgage deal.
Good news for the property market? We'll see. It should give buyers a bit of encouragement that they will be able to get a mortage and at a rate they can afford to pay - if they have a clean credit record and plenty of deposit that is. Anything that stimulates the market will be good, and if Gordon Brown decides to call a halt to stamp duty for a period of time - I think there could be a feeding frenzy with bargain hunters galore!
*Northern Rock paid a huge amount of money back to the treasury, reportedly around £9billion.
02/09/2008
More good news - we are on a roll!
Mr Darling has finally decided to end speculation about his plans for Stamp Duty - and not a moment too soon! Increasing the figure at which it starts from £125,000 to £175,000 will certainly help a number of first time buyers but just putting and end to the questions in people's minds is far more important for the housing market.
Mortgage interest rates are coming down thick and fast as lenders are back competing for business, it may be predominantly in the low loan to value brackets at present but it is a step in the right direction and will eventually make its way up the loan to value chart.
The sun is shining, the birds are singing...all we need now is positive headline, somewhere at sometime and we might be able to get through this credit crunch!
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