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Few landlords will sleep easy thanks to Labour reforms threat – analyst

August 20, 2024August 20, 2024 interestratesinfo

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A prominent rental market analyst is warning that elements of the reform legislation proposed by Labour “are casting dark shadows” over the lettings sector, with few landlords likely to sleep easy at possible threats to their investments.

Doug Shephard, director of the Home website – a listings platform that also conducts respected monthly market analyses for the lettings and sales sectors – says the new government’s upcoming Renters Rights Bill may prove to be final straw for many landlords.

Mortgage rate cuts are unlikely to be ‘disturbed’ by first inflation rise of the year – here’s why

August 20, 2024August 20, 2024 interestratesinfo

The trend of lenders cutting mortgage rates is unlikely to be ‘disturbed’ by the first inflation rise of the year, according to experts.

Inflation rose to 2.2 per cent in the 12 months to July, up from 2 per cent the previous month, ONS figures revealed earlier today.

While it means inflation is back above the Bank of England’s 2 per cent target, it was a smaller-than-expected rise with markets expecting a 2.3 per cent increase.

Bank of Mum and Dad to lend £30bn to first-time buyers over next three years – Savills

August 20, 2024August 20, 2024 interestratesinfo

Some £30bn is expected to be gifted to first-time buyers in the next three years, according to estate agency group Savills.

Last year £9.4 billion was gifted to 164,000 first-time buyers, accounting for a huge 57% of all mortgaged first-time buyers.

Frances McDonald, director of residential research at Savills, said: “While many homebuyers enjoyed record-low interest rates during the early part of the decade, more stringent mortgage requirements, which have been in place since the start of the pandemic, have impacted higher-loan-to-value (LTV) lending, most commonly used by first-time buyers.

UK house prices drop by more than £5,000 in August

August 20, 2024August 20, 2024 interestratesinfo

The average price of a newly marketed UK home has dropped by more than £5,000 month-on-month in August, as the distractions of school summer holidays traditionally bring a dip in prices.

Buy-to-let blues: rent prices rise as landlord purchases hit record lows

August 19, 2024August 19, 2024 interestratesinfo

Average monthly rents in Great Britain have increased by £74 in the last year, as landlords continue to exit the market.

A new report shows that landlords are buying far fewer homes than before, resulting in tenants having less choice and facing higher costs.

Read on for more about what’s happening to rent prices, and how the new government plans to overhaul the rented sector.

Should I use my pension lump sum to pay off the mortgage on my buy-to-let? DAVID HOLLINGWORTH replies

August 19, 2024August 19, 2024 interestratesinfo

I have a second home, a small two-bed flat, which I own with a £93,000 repayment mortgage fixed at 2.69 per cent until October 2025.

The mortgage is set to be paid off in October 2035, and my main home is already paid off. Currently, my daughter lives in the second home rent-free.

Once she moves out later this year, I need to consider whether to change the mortgage to buy-to-let and rent the property out.

Early rental valuations indicate that the rent will cover the mortgage.

I have recently retired, although I am not due to get my state pension for another seven years.

Should I use the tax-free pot from my private pension to pay off the mortgage and use the rental amount as monthly income? What should I take into consideration?

Mortgage shelf-life plummets, and product choice dips too

August 19, 2024August 19, 2024 interestratesinfo

The average shelf-life of a mortgage product has dropped to just 17 days, down from 30 days a month, according to Moneyfacts.

Average mortgage rates on the overall two- and five-year fixed rate deals fell month-on-month by 0.18% and 0.15% respectively, halting five consecutive months of rises. These rates are now at their lowest level since March 2024.

The overall average two- and five-year fixed rates fell between the start of July and the start of August, to 5.77% and 5.38% respectively. The average two-year fixed rate is 0.39% higher than the five-year equivalent. The two-year fixed rate has now been higher than the five-year equivalent since October 2022.

500,000 UK households warned mortgage rate will be hiked to 9.24 per cent

August 19, 2024August 19, 2024 interestratesinfo

Half a million homeowners are on ‘rip-off’ mortgage rates of up to 9.24 per cent due to easy mistake. Borrowers who fail to take out a new mortgage in time before the term ends are automatically shifted on to their lender’s Standard Variable Rate (SVR) where costs can top 9.24%.

The average two-year fixed rate is currently 5.66 per cent, according to data site Moneyfacts.co.uk, while the average five-year fix is 5.3 per cent. In comparison the average SVR is a whopping 8.16 per cent, the Sun newspaper has reported.

When does it make sense to refinance your mortgage?

August 19, 2024August 19, 2024 interestratesinfo

There are a few scenarios where refinancing your mortgage could make sense:

It will allow you to get a lower interest rate. You might refinance if doing so will allow you to lower your interest rate, either because “interest rates have dropped since you first obtained your mortgage” or “your credit score has improved since taking out your current loan,” said Bankrate. Ideally, your new rate will be “one-half to three-quarters of a percentage point lower than your current rate” to offset costs associated with refinancing.

You want to change your loan term or structure. Refinancing can also make sense if you’d like to change your loan’s term or structure. For instance, maybe you want a longer repayment term to lower your monthly payments or maybe you want a shorter term to lower the amount you’ll pay in interest. Or, maybe you “have an adjustable-rate mortgage that’s about to convert to the variable-rate period,” in which case “you could refinance to a fixed-rate loan to guarantee predictable monthly payments,” said Bankrate.

Housing market demand surges following interest rate cut

August 19, 2024August 19, 2024 interestratesinfo

The housing market experienced a surge in activity following the Bank of England’s recent decision to cut interest rates, according to a leading property website.

Estate agents reported a 19% jump in enquiries about properties for sale after 1 August, when compared with the same period last year, research by Rightmove found.

It came after the Bank cut rates for the first time in more than four years from 5.25% to 5%.

Rightmove’s Tim Bannister said it was clear that the Bank’s decision had “sparked a welcome late summer boost in buyer activity”.

He added: “While mortgage rates aren’t yet substantially lower since the rate cut, the fact that the long-hoped-for first cut has finally arrived, and mortgage rates are heading downwards, is positive for home-mover sentiment.