Mortgage Archives - Equity Financial Solutions

Rental protection

EFS_Admin — Fri, 11 Oct 2019 12:48:02 +0000

Because it’s more than just a roof over their head, it’s home.

Renting is on the rise. In the last 10 years, the UK private renting market has doubled. Trouble is, where homeowners see the need for protection to cover their mortgage, renters may not have considered protection to cover their rent. As a result they may be leaving themselves vulnerable if they became ill or injured and were unable to work.

– Nearly 1 in 4 people in the UK are expected to be renting privately by 2023
– UK rents are expected to climb by 15% over the next five years
– Renters spend 40% of their income on housing costs, double what owner-occupiers pay

That’s where Rental Protection Plan can help. It could help financially protect you by providing a monthly benefit which can be used to help pay the rent, in the event of a valid claim during the length of the plan. Give us a call today if you would like some further information, we would be happy to talk you through the options.

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Home moving

EFS_Admin — Fri, 06 Sep 2019 11:34:57 +0000

The number of people moving home increased for the first time in three years in the first half of 2019.There were 160,540 homemovers in the first half of 2019, up by 810 (1%) compared with the same period in 2018 according to analysis by Lloyds Banking Group. Homemovers are still behind first-time buyers however where the numbers increased at a slightly higher rate of 7,460 (5%) to 173,790 in the first half of 2019.

Regionally, the North, South East and Scotland are seeing falls (between 0.3% and 1.9%) in the numbers of homemovers in the first half of 2019 compared to the same period in 2018. In 2019, four regions have seen increases in the numbers of homemovers by over 2% – North West (15,979 up 2.5%), West Midlands (13,634 up 2.6%) and Northern Ireland (3,280 up 2.5%). The South East has the highest number of homemovers in the UK at 36,316 – this has dipped slightly (0.9%) over the last year and 9.5% below its 2014 high of 40,120.
Over the past five years, the average price paid by homemovers has grown by a staggering £79,627 (32%) to £329,648. The South East has seen the highest growth, from £137,376 (43%) to £460,395 followed by East Anglia (41%), Greater London (37%), the North West and East Midlands (both at 36%). London remains the most expensive homemover region, almost twice the UK average (£329,648) at £650,510. The least expensive homemover region is Northern Ireland with an average price of £189,905.

The amount of deposit or existing equity required has increased by 22% over the past five years from £86,398 in 2014 to £105,260 in 2019. In the capital, the deposit required for London homes has increased to more than £200k (£213,907) for the first time, which represents an increase of 26% over the past five years. The next largest deposit amount is in the South East at £150,970 followed by South West (£117,298) and East Anglia (£110,207). All other regions have deposits at less than £100k. Northern Ireland has the least amount of deposit required at £56,763 but has seen the biggest increase over the past five years at 52%.

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Little dipper

EFS_Admin — Fri, 12 Jul 2019 13:58:36 +0000

According to the Halifax, average house prices dipped marginally in June, falling by 0.3%, to stand at £237,110. This extends the largely flat trend the lender has been tracking over recent months. However, more generally the housing market is displaying a reasonable degree of resilience in the face of political and economic uncertainty. Recent industry figures show demand looking slightly more stable, with mortgage approvals ticking along just above the long-term average.

One of the major restraining factors on the volume of transactions in the market continues to be the very low level of stock for sale. Halifax highlight that, with the ongoing lack of clarity around Brexit, people will be looking for more certainty in the coming months, both to encourage them to list their property and to create the confidence needed to encourage buyers.

Supporting the analysis is the Bank of England industry-wide figures that show the number of mortgages approved to finance house purchases – a leading indicator of completed house sales – have fallen by 636 from April to 65,409 in May. The May rate is now just below the 5 year average monthly approval rate of 66,138 and 46 above the previous 12 month average of 65,363. (Source: Bank of England, seasonally-adjusted figures) The RICS UK Residential Market Survey saw a slightly more stable picture coming through during May. The sales to stock ratio increased slightly to 31.5%. Agreed sales fell for the tenth successive month, but less so than previously. Near term expectations remain subdued but sentiment on the longer term outlook for sales and prices signals modest recovery further out. (Source: Royal Institution of Chartered Surveyors’ (RICS) monthly report)

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Slowly rising

EFS_Admin — Sun, 30 Jun 2019 21:01:18 +0000

Halifax saw a slight increase in house prices between April and May, but the overall message is one of stability. In its commentary on the housing market the lender highlighted that, despite the ongoing political and economic uncertainty, underlying conditions in the broader economy con-tinue to underpin the housing market, particularly the twin factors of high employment and low interest rates. On a monthly basis, house prices rose by 0.5% and in the latest quarter (March to May) house prices were 2.5% higher than in the preceding three months (December to Febru-ary). House prices in the three months to May were 5.2% higher than in the same three months a year earlier
May’s annual change figure of 5.2% comes against the backdrop of a particularly low growth rate in the corresponding period in 2018, which has had an impact on year-on-year comparisons. Forecasts of future growth are supported by industry-wide figures which suggest no real change in the number of homes being sold month to month, while Bank of England data show the number of mortgages being approved rose by almost 6% in April, reversing the softness seen in the pre-vious month. While current conditions may help those looking to make their first move onto the property ladder, existing homeowners will doubtless be considering long-term house price growth which continues to look subdued in comparison to recent years.
Looking ahead, Halifax expect the current trend of stability based on high employment and low interest rates to persist over the coming months, though clearly any downturn in the wider econ-omy would be keenly felt in the housing market.

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Time to plan

EFS_Admin — Fri, 28 Jun 2019 20:31:31 +0000

Pensioners of tomorrow risk a shortfall of more than £68,000 over the course of their retire-ment as one in three (33%) middle-aged Brits expect to survive solely on their state pension, new research from Nationwide Building Society shows.
The shortfall would be enough to enjoy a round-the-world cruise for two, buy a new car, build a conservatory and gift the grandchildren a deposit for their first home. Nationwide, which polled more than 1,000 people aged 40 to 60, commissioned the research to better understand the issues people face when it comes to giving up work. The research shows that just four in ten (40%) people in middle age have a private pension in place. It also highlights that more than half (52%) of people aged 40 to 60 are worried about affording retirement, with four in ten (43%) not believing they will be able to afford the lifestyle they want when they finish work.
Those in their middle age expect their monthly shortfall in retirement to reach an average of £208. This equates to £37,440 when taking into consideration the current retirement age and average life expectancy. However, the reality is that their shortfall could be around twice as high, with those polled already in retirement aged 60 and over saying they receive £505 a month in state pension on average but require £885 a month to live on – £616 for essential bills and £269 discretionary spending. For those without an additional pension to take them beyond the basic state allowance, this leaves a shortfall of £380 a month, or £4,560 a year. This means tomorrow’s pensioners may need to tighten their belts and hunker down in retire-ment – a time they want to be enjoying life and supporting their family. In an average 15-year retirement the shortfall would amount to £68,400, well over twice the average £27,000 annual salary.
The survey shows that those in middle age have an average of £125,350 equity currently in their home but would try and find other ways to survive before tapping into their property wealth. Around a third (32%) see accessing equity in their property as a last resort, while more than a fifth (28%) don’t want to leave any debt to their family. A quarter (24%) wouldn’t know who to approach if they needed advice on their retirement.

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No more IO

EFS_Admin — Fri, 28 Jun 2019 20:30:40 +0000

The number of interest-only mortgages fell by (13.1 per cent) in 2018 compared to the previous year, UK Finance figures published this week reveal. It means the total number of pure interest-only mortgages has now fallen by over half (54 per cent) in the past seven years, from 2.5 mil-lion in 2012 to 1.23 million in 2018. Meanwhile, the number of interest-only mortgages due to ma-ture in 2019 and 2020 fell significantly (41.9 per cent), falling from 217,000 to just 126,000.
The latest reduction follows an industry-wide commitment by regulated mortgage lenders to con-tact all interest-only borrowers with loans scheduled to mature before the end of 2020, to ensure they are on track to repay their loans or work out an alternative solution. UK Finance has also produced a consumer leaflet to raise awareness of the potential options available to interest-only borrowers, including switching to a full repayment mortgage or paying back their loan in full ahead of schedule.
The figures show that there were 360,000 partial interest-only (part and part) homeowner mort-gages outstanding at the end of 2018, 16.1 per cent fewer than in 2017 and down from 705,000 in 2012, and the number of interest-only loans set to mature by 2020 shrank by 91,000 in 2018 to just 126,000 loans, a fall of 41.9 per cent compared to 2017.
The number of outstanding interest-only mortgages appears to have more than halved in the past seven years, with UK Finance highlighting the continuing rapid contraction in the numbers that were set to end on or before 2020, the first anticipated peak in maturities.

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