Mortgage rates at record low

Britain's second-biggest mutual lender, Yorkshire Building Society, has recently revealed a mortgage at 0.98pc. It is the lowest rate ever offered and the deal is the cheapest nationally-available rate to anyone re-mortgaging.  The way it works is that it offers a "discounted rate" which tracks the lender's standard variable rate, currently 4.74pc, at a 3.76pc discount when  the lender's standard variable rate falls or rises, the rate will also move down or up in line. As with other low rate mortgage’s these arrangements often come with large fees,  £1,495 for the Yorkshire Building Society and early repayment during the discounted period incurs a 1pc charge.

During this year mortgage rates have been falling rapidly with the Bank Rate cut in August continuing to fuel this pattern. The Yorkshire building society is one of several lenders which have dropped their rates for high-value borrowing recently it’s available for borrowing of up to £5m.

Barclays also recently reduced its rate for mortgages between £1m and £3m from 1.85pc to 1.49pc, fixed for two years. Santander cut its five-year fixed rate to 2.09pc from 2.59pc in September for those borrowing between £250,000 and £3m.  According to comparison site Moneyfacts, the average two-year fixed mortgage rate is now at 2.34pc, down from 2.67pc this time last year.

David Hollingworth, of London and Country, said that this option would be more attractive to those borrowing a larger amount. But he added. "You've got to be careful not to be purely drawn to the fee, and you also have to keep in mind that this is linked to standard variable rate.” Enables IFAs in Bishops Stortford can help you find the right mortgage to suite your needs.

Your home may be repossessed if you do not keep up repayments on your mortgage.

http://www.telegraph.co.uk/personal-banking/mortgages/lowest-ever-mortgage-rate-of-098pc/

Issued by: Enable Independent Financial Life Planners • 
25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE 

What you need to know to become a landlord…

At Enable Independent, IFA’s in Bishop’s Stortford we know that if you are trying to get into the buy-to-let industry, you will need to treat it like a business, so you must make sure that your investment adds up.

To be able to get into the buy-to-let market you will need about 25% deposit, this will ensure you are able to access a mortgage at the best rates available.

Typically most landlords choose to take out an interest only mortgage, as repayments are cheaper, and they plan to sell the house at the end of the term of the mortgage to pay off the loan. However this might not be the best option for you, and a discussion with an IFA (Independent Financial Advisor) such as Enable Independent is probably a good starting point.

Make sure that the figures add up, the mortgage lender will need to make sure you can afford the BTL mortgage, so make sure the projected rental income is high enough. Get some advice from a local estate agent, they will be able to give you advise on properties that could offer the best rental return.

On top of the mortgage arrangement fees, if you buy a property over £125,000 you will need to pay stamp duty, to see the latest stamp duty current thresholds visit the HMRC’s stamp duty page, valuations, surveys and legal work.

Once you have purchased your buy-to-let you will need to consider the cost of advertising through a lettings agent.

Make sure you have a reasonable buffer, just incase your property stays empty or you need to redecorate, the average rent void per year is 20 days according to the Association of Residential Letting Agencies.


Issued by: Enable Independent Financial Life Planners
 25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE.

Commercial Property Investments

Commercial property is traditionally core to many individual financial portfolios. So it could be good news that the lack of grade A space in the industrial and distribution market has become so acute across the UK that rents for prime space have risen for the first time in three years according to the latest research by Lambert Smith Hampton.

National Industrial and Distribution Market 2012 analysed activity across 59 locations in 11 regional UK centres during 2011. Across the locations recorded in LSH’s research, prime rents increased in 27 per cent of locations, with a further 39 per cent of the locations seeing prime rents stabilise.

In the East of England, availability was recorded as the lowest across the UK. In Essex, where Chelmsford, Basildon and Thurrock represent the county’s most dominant industrial markets, the supply of space is no less of a challenge with 5.7 per cent of total stock currently on the market.

Demand in Cambridge and the surrounding area has remained stable throughout the year resulting in a total take-up of 529,921 sq ft in 2011.The majority of demand has been focused on units less than 5,000 sq ft which accounted for 68 per cent of overall activity.

The largest transaction in 2011 was the letting of Titan, Space Ten, Papworth, which saw Ultra Electronics take the 37,533 sq ft unit. The number of requirements for larger good quality space has remained stable, but due to the lack of new development, demand outstrips supply. Enable’s IFA’s can talk you through your commercial property investment options.

Getting a mortgage for the first time...

Experienced IFA’s like enable of Bishop’s Stortford have notice that first-time buyers have been helped along by an increase in the number of mortgages available to borrowers with small deposits. This began in 2011 and has continued into 2012 there have been many lenders offering 95% deals.

According to the Mortgage Advice Bureau, the number of 95% loan-to-value (LTV) deals currently open to first-time buyers is at a four-year high, with 59 deals available from 21 different lenders.
This compares with just 25 in February 2011, nine in 2010, and three in 2009.

Liza-Jane Kelly, sales director of estate agent Marsh & Parsons, said that while stamp duty was driving sales, an increase in lending at higher LTVs was also a factor. "The number of higher LTV mortgage deals is slowly increasing, and while criteria still remains a problem first-time buyer demand for finance is by no means dead and buried," she said. "With rents rising and average mortgage rates so low, many see now as the ideal opportunity to get on to the property ladder."

Eddie Goldsmith, chairman of the Conveyance Association, said it wasn't too late for buyers who wanted to beat the deadline, "but time is running out". Buyers should make their solicitor and the property seller aware from the outset that they wanted to complete by 24 March. If you are looking for the best mortgage deal to beat the stamp duty Enable of Bishop’s Stortford can help.

At Enable we are giving away several Kindles and £50 worth of vouchers, to enter just LIKE our Facebook page http://www.facebook.com/enableflp

Which Mortgage? What about offsetting your mortgage

The reality for most borrowers is the fact that their monthly mortgage payment is probably at the top end of what they can afford and they either do not have the spare cash to overpay, or they are using any spare money available for savings, to pay other debts or fund other purchases.

And with most lenders once that spare cash is paid into the mortgage, it is gone and cannot be used for anything else. This is probably why many borrowers prefer to keep their spare cash ‘liquid’ in savings accounts where they can access it for whatever they wish.

But for those who want the benefits of overpayment without technically overpaying, there is always the option of an offset mortgage. Here, instead of putting your savings into a separate account or ISA, you choose to put them in an offset pot alongside the mortgage. Instead of earning interest on the savings you offset the interest you would have earned against your mortgage, effectively overpaying.

With normal savings rates being particularly low, many borrowers with significant savings would benefit from offsetting as they would earn the equivalent of the mortgage rate on their savings. This method of overpaying also allows the borrower to keep their savings ‘liquid’ as they can always access the money from the offset pot at any time.

It is also worth bearing in mind that any interest you earn on your savings is taxable at your highest rate of income tax, which might be 20%, 40% or, as of April 50% for the highest earners. If you use your savings to overpay your mortgage instead, not only are you effectively earning interest on them at the mortgage rate, but because they no longer technically exist as ‘savings’ you do not pay any tax.  Enable can help your look at your mortgage options again.

How to reduce your mortgage-overpay...

In these ‘money saving’ times, when advice about financial matters is more sought after than ever before and everyone considers all manner of ways to save cash on every expense, it is surprising how few people concentrate on the biggest financial burden they are ever likely to have: their mortgage.

The monthly mortgage payment is often viewed as a ‘given’; it can’t be changed so people continue to let it run as always and in that sense, borrowers are accepting that they’ll probably have the debt for at least 25 years and there’s nothing they can do about it. Of course, this is very far from the truth; one only has to consider the simple act of overpaying the mortgage each month to find a highly suitable way to save large sums over the life of the mortgage.

The benefits to be had from overpaying your mortgage can be so significant that it is often surprising how few borrowers actually do it. With the mortgage being the most long-term financial responsibility an individual will have, anything that cuts the number of years you will have your mortgage for and also decreases the overall amount you will have to pay through saving on the interest payable is obviously a good thing.

Overpaying also increases the amount of equity you have in the property, thus allowing you to access far more competitive mortgage deals when you come to look for new mortgage finance. If you are looking to make any changes in your mortgage Enable Indpendent IFA’s of Bishop Stortford are here to help.

Local Building Society's are doing there bit….

Couple of items I’ve noted recently:  Cambridge Building Society has launched a five-year fixed rate mortgage at 4.19% specifically for large loans of between £500,000 and £2m. The mutual will accept loans of up to £750,000 on an interest-only basis. The five-year fixed is available up to 75% LTV, with an arrangement fee of 0.2% or a minimum of £2,000.

Carole Charter, marketing manager at the Cambridge Building Society, said: "Larger loans are not suitable for everyone, but there are people out there who would benefit from this unique product."
She added: "The Cambridge is committed to offering a range of options for borrowers and the larger loan mortgage is a product that we feel we need to be able to offer our wealthier customers looking to purchase a house in this price range."

Also, the Cambridge Inflation Linked Bond Receives Surge in Interest.  All applications for the five year bond must be received by 15th September 2011*. The Cambridge Inflation Linked Bond pays customers a return, at maturity, that tracks the annual rate of inflation, as measured by the Retail Prices Index (RPI), plus a guaranteed 1.00% gross p.a./AER** fixed for five years.

Andy Lucas, Head of Cambridge Direct at The Cambridge Building Society says: “We have seen surge in customer interest following the recent withdrawal of the NS&I index-linked certificate.
“Customers who want to take the opportunity to invest in a product that offers protection against the effects of inflation need to take advantage of the inflation linked products that are left in the market whilst they are still available.”

Enable Independent, IFA’s of Bishop's Stortford are here to help with savings and mortgages anytime you want to re-think your finances

Property house prices - it's time to review your property investments

It may not be the most ground breaking  news but it confirms what many have long suspected.  The National Housing Federation (NHF) report says that the UK faces an unprecedented “chronic under-supply of homes” in England.  It claimed the acute shortage was a result of the difficult economic climate making mortgages difficult to obtain but that at the heart of the problem remains a chronic under-supply of new homes.

In 2010/11 just 105,000 homes were built in England – the lowest level since the 1920s.
More government investment in affordable housing would stimulate a wider, faster economic recovery and help fix our broken housing markets, according to the Federation.

It is calling for suitable surplus public land to be made available for the building of affordable homes, for local authorities to regularly assess housing need and for ministers to make a renewed commitment to building the homes the country needs. Minister Grant Shapps said government says it is making more land available for building and is investing £4.5bn in lower-cost homes that would “get Britain building again”. Shapps said: “That’s why I’ve announced plans to release thousands of acres of public land for house building.” But the NHF said Government plans represented a cut of 63% on the previous programme of government spending on homes to rent or buy.  NHF campaigns director Ruth Davison said: “What we need to do is to build new homes.”

What to talk it through? Come and talk over your property investments with an IFA at Enable Independent Ltd.

When to buy a house - Safe as Houses

In the news recently the National Housing Federation’s independently-commissioned Oxford Economics Report predicts:  Home ownership in England will slump to just 63.8% over the next decade - the lowest level since the mid 1980s – locking an entire generation out of the housing market.  According to a new study,  huge deposits, combined with high house prices and strict lending criteria, have sent home ownership into decline in recent years and the downward trend will continue for the foreseeable future.

The Federation warned the housing market will be plunged into an unprecedented crisis as it forecast steep rises in the private rental sector, huge social housing waiting lists, and a house price boom – all fueled by a chronic under-supply of homes. 

According to Oxford Economics, who were commissioned to produce the forecasts: 
In England, the proportion of people living in owner occupied homes will fall from a peak of 72.5% in 2001 to 63.8% in 2021.

In London, the majority of people living in the capital will rent by 2021 with the number of owner occupiers falling from 51.6% in 2010 to 44% by 2021.

The North East will be the only English region to see any increase in owner occupier numbers over the next decade, rising marginally from 66.2% to 67.4%.

The average house price in England will meanwhile rise by 21.3% over the next five years from £214,647 in 2011, to £260,304 in 2016,

As investors what should you do? If you own a property hold on to it if you have the capital maybe buy to let is not such a bad idea again? Enable IFA's in Bishop Stortford can help you talk through what to do.