Category Archives: Mortgages

Can a crystal ball help us to forecast the affect of Brexit on the UK property market
Mortgages

A deeper look into the crystal ball of mortgages

At present, the 5-year fixed rate mortgage is much lower than this time in 2018, not only in the residential market but also in the buy to let arena too. In contrast to this, there has been a ‘creeping rise’ in 2-year and tracker products.

For the residential mortgage market, the often-mooted comparison is between the 2-year or 5-year deals. Historically a 5-year deal would cost a certain percentage more and whilst this remains true for some lenders, many have adjusted their medium-term plans for lending, bringing their 5-year products far closer to parity with the 2-year fixed.

Property Master, a digital platform that uses algorithms to match the requirements of individual private landlords against the entire BTL mortgage market, says that it is 5-year fixed rate mortgages where the price falls can be seen most clearly.

The platform’s monthly ‘Mortgage Tracker’, which follows the costs of a range of BTL mortgage products for an interest-only loan of £150,000 shows 5-year fixed rate offers for 50, 65 and 75 per cent of the value of a property are all down year-on-year.

Savings for each of these mortgages for individual landlord borrowers respectively are £8, £29 and £21 per month.

The cost of many 2-year fixed rates was up year on year. Tracker deals, historically lower than fixed-rate deals are generally up (year on year) too.

But why?

Lenders seem to be speculating about the short-term future of interest rates, paying close attention to the ongoing ‘Punch and Judy’ show between the UK and the EU, imaginatively titled: Brexit.

While the official economic forecast predicts a period of slowing growth, it is also difficult to predict what could happen with interest rates. Some believe that a spike in the cost of goods could trigger an increase in the bank of England base rate to curb spending. Others believe that ‘false inflation’ could be softened by a reduction in the base rate. Quantitative easing is another action which could be employed to aid the economy in times of need. Any of these outcomes could mean a change in the cost of wholesale lending for banks.

The lending strategy is often underpinned by speculation in the market, and with the next 12-24 months being hard to predict, my guess is that banks would prefer their mortgage holders to have medium to long term deals. This provides the bank with the security of a medium-term contract, allowing them to make medium-term plans, set to be reviewed following the turbulence of Brexit if the Brexit process ever ends…

There has also been a rise in popularity for longer-term fixed rates such as 7- and 10-year deals, with popularity leading to competitive rates, many are opting for the ‘longer, longer’ fixed rate.

If you would like to review your current mortgage or are thinking of purchasing a new home for yourself or to invest in property, interest rates are currently quite attractive and there are many options. Speak to one of our advisors.

James Boland

Managing Director

Morgans McGrath, in partnership with Dawsons financial services.

dawsonssell2
Dawsons, Mortgages, Sales

Dawsons ready to sell your property for free – it’s on the house!

With winter behind us Dawsons is ready to spring into action with their biggest and best competition ever – ‘Sell your Home for Free’.  

If you have a property you want to put on the market contact Dawsons before the end of June, put it up for sale with the leading South Wales estate agent and you will be entered in the competition with the winner paying no agent fees! It’s on the house!

Jo Summerfield-Talbot, Dawsons’ Director of Sales said: “It is all about the close-knit communities we work within. We decided it would be a great idea to try and give something back to the lucky winner by selling their home for free. 

“We have been in business for more than 25 years ago and have forged many great relationships during this time, not just with business associates but more importantly with our clients who have remained loyal throughout the years.

“Our success is not only attributed to the them but also the many recommendations we receive for which we are immensely grateful and proud, equally the outstanding work our teams put in to make it as seamless as possible, by always going the extra mile.”

So, to enter call your local branch of Dawsons, book a valuation, place your property on the market before the end of June and you will be entered into our prize draw. It really is as simple as that.

Properties will have to be valued by Dawsons between Tuesday, March 20th and Thursday, May 24th to be eligible for the competition, and properties will need to be placed on the open market within four weeks of the closing date of the competition.

You can see the full competition T&C’s on the Dawsons website www.dawsonsproperty.co.uk.

NEW STARTERS
Auctions, Charitable Events, Community, Dawsons, Lettings, Mortgages, Relocation, Sales

Dawsons expanding staffing levels in readiness for 2018

While many businesses wind down at the end of the year, Dawsons have been increasing their staffing levels in readiness for another busy New Year.  With more than 13 sales and lettings branches throughout Swansea and Llanelli, Dawsons were looking to recruit staff for several new roles within the company which will bring their staffing levels to more than 120.

Dawsons are a locally-owned business, established in 1991 with many years’ experience in the field of Residential and Commercial Property Sales and Rentals, together with their highly successful Auction Department,  Land and New Homes, Survey, Financial Services and Fine and Country Departments.  2017 proved to be another very successful, busy year with the acquisition of a smaller local letting agent and to top it off winning the Relocation Agent,  Best Agent Regional Winner 2017.

The new staff (pictured above) were all employed in the last quarter of the year and are spread throughout the company covering several different roles from Administrators, Sales and Lettings Negotiators, Inspectors to Mortgage Advisers,. They bring  with them a diverse wealth of knowledge and experience within their field.

Dawsons Sales Director Jo Summerfield said: “We strive to employ the highest, quality staff to ensure we uphold Dawsons core value in delivering excellence.  Customer service is key to our hugely successful operation, therefore maintaining, year on year our No 1 position of independent agents.”

Tim Kostromin, Partner at  Dawsons, said: “We invest in invaluable external and internal training for all our staff thereby ensuring their career development within Dawsons and equally rewarding them for always going that ‘extra mile’, our Rateragent reviews are testament to this.  Staff moral is critical to a successful business as they are the fore front of all we do.”

Chris Hope, Senior Partner, added: “Helping to support our local economy whilst providing a much needed service for those living in the area is a key factor in our business.”

Dawsons’ marketing team came up with a great initiative for 2017  in supporting local businesses in the use of their Reward Card, which has proved to be a huge success, so much so, Dawsons have received a flood of enquiries from other local business’s as to how they become involved in our Reward scheme.

With charitable organisations also being at the forefront of Dawsons’ priorities, already foundations have been laid for many planned fundraising events……….2018 is looking to be another exciting year for all those involved in the company.

Staff 12th July
Auctions, Lettings, Mortgages

New promotions, appointments and staff moves as leading estate agent just keeps on growing

After winning the title of Wales Lettings Agency of the Year at The Lettings Agency of the Year Awards 2016, independent estate agent Dawsons has gone from strength to strength.

In recent months the firm, which has eight sales branches throughout Swansea and south west Wales offering a wide range of property services, has made a number of new appointments. Dawsons is pleased to announce two new additions, Robyn Lewis and Dafydd Spear.

“Robyn joins our highly successful auction department bringing a wealth of experience, boundless energy and enthusiasm, three factors that mean Robyn can easily and confidently handle any residential or commercial property queries. With a very broad knowledge of the housing market and experience spanning a number of years in the industry we also welcome Dafydd to complement our very busy Morriston team,” said Joanne Summerfield-Talbot, Director of Residential Sales at Dawsons.

It’s not just new team members that Dawsons is celebrating, there has also been a variety of promotions and moves affecting current staff. Emma Bolton has transferred from the firm’s successful Marina branch, where she worked in sales and lettings, to their Mumbles branch to take on the role of Branch Manager. Emma’s drive, determination, energy, and vast knowledge and experience in the housing market makes her the perfect staff member for the job.

Joanne added, “Due to the continued growth of our business we have made a number of internal moves throughout our sales department for existing key staff to provide additional support with their vast knowledge and experience, and for some of our newer members these moves will help with their progression and advancement within Dawsons. We wish all of them the best of luck in their new roles.”

Chris Hope, Dawsons Senior Director
Mortgages

To buy or rent – the great debate that rumbles on

It is one of life’s great debates that often dominate our lives year on year: is it better to buy your own home or rent someone else’s?

The simple answer is: there is not right or wrong decision, but financial trends – a stable or unstable economy – will often dictate that decision.

Here Chris Hope, Senior Partner at Dawsons Estate Agents, weighs up the pros and cons of the buy or rent conundrum.

“People are always asking what is the best course of action when it comes to buying or renting,” said Chris.

“Of course personal circumstances will always dictate and every four or so years the buy/rent debate shifts one way or the other.

“To be perfectly honest at the moment it is probably a 50/50 scenario when looking at a decision to buy or rent.”

Just to put into context Chris gives an example of a three-bedroom terrace in the Morriston area of Swansea.

At around £100,000 to buy that would give you a £385 per month on a typical 25-year mortgage with a 10/15% deposit. That would compare to £500 rent per month.

“So looking at the averages there is not a great deal of difference when you take in consideration the buyer’s initial outlay with a deposit,” reflected Chris.

“Looking at it historically – 20 years ago those that rented were those who couldn’t afford to buy.

“But whereas there has been a social status element with owning your own home it’s nowadays become a lifestyle choice. Renting is now socially acceptable, and to put that into perspective in our Marina Office we only have one or two lettings properties at any one time. The demand is that great.

“Renting now gives young professionals flexibility. The fact the house needs painting or decorating is not longer and issue. You can just move!

“The culture has definitely changed – renting is a socially accepted way of living. Renting has given people freedom and gives you flexibility and latitude, especially when a career may take you around the country.”

But where rent gives you flexibility and no real ties buying is seen more and more as an investment. For instance fairly recent figures from Santander Bank indicated that ‘lifetime renters’ who never manage to climb on to the property ladder are likely to hand over around £300,000 to private landlords during their lives.

“But rental does look attractive especially when you look at people who have bought at the wrong time have been caught in a negative equity situation – that brings it’s stresses and strains,” added Chris.

“Despite that, compared to other countries such as USA and Germany we are still largely a nation of homeowners. Some people see an investment in a property is an extra pension at a time when pensions cannot be relied on to fulfil financial needs in retirement.

“There is still an advantage on buying a property because of the basic economics of what it costs to buy compared to cost of rent.

Having a mortgage-free environment is a comfort blanket.”

To put that into perspective a recent survey from HSBC talked of a growing divide between property ‘haves’ and ‘have-nots’.

Analysing that the generation of owners who bought in the early 1980s tended to become mortgage-free at 56. Recent buyers – average age 29 – are expected to be mortgage-free at 60, whereas young people who say they do not expect to be able to buy until age 35 are likely to be approaching 68 before they own a home outright.

In conclusion Chris says: “There is no right and wrong to be honest – but it changes its balance determined by financial stability.”

Continue reading →

Oliver Adair MAB
Mortgages

Mortgage prices are at record lows – is now the time to take one out?

Analysts have announced that there may never be a better time to take out a mortgage, with figures showing that rates have nearly halved over the past 12 months.

With lenders in an ongoing mortgage price war as they try and persuade people to choose their mortgage deals over their competitors’, the UK’s leading independent mortgage broker, Mortgage Advice Bureau, looks at how potential borrowers could use the next six months to their advantage when buying a property.

“Swap rates can directly influence the interest rate that you pay on your mortgage, and last year the general consensus was that the Bank of England was going to increase the Bank Rate from its record low of 0.5%, which caused swap rates to increase in preparation. However, this increase never happened which has caused swap rates to tumble back down, thus providing lower interest rates for mortgage deals,” said Oliver Adair from Mortgage Advice Bureau.

“With the market finally beginning to catch-up on the slowed activity from last year and house prices continuing to increase, there is an air of confidence around lenders, hence the raft of cuts.”

Banks and building societies are also finding that they have surplus money due to the Funding for Lending Scheme. Launched in 2012, the Funding for Lending Scheme originally allowed banks and building societies to borrow cheaply from the Bank of England on the condition that they then use some of the money to offer mortgages to homebuyers, though it is now focused on funding lending to small and medium-sized enterprises (SMEs).

“With the current low level of inflation and the Bank of England concerned that lifting the Bank Rate would destabilise Britain’s ongoing recovery, it is looking increasingly more likely that interest rates will not increase until sometime in 2016,” explains Oliver. “This leaves lenders to fight amongst themselves in a thriving market full of previously struggling homebuyers hoping to take advantage of the low rates.”

The war will continue and fixed-rate deals may well stay at their record low rates for the coming months, alongside typical variable rates that have halved over the past 12 months, and five-year fixes that could go below 2%.

Oliver added, “The rate war is showing no sign of dwindling any time soon and with various new lenders entering the market, competition is heating up. Over the next few weeks, rates could reach levels that may not be seen again for an extremely long time. But the question is – what’s next for interest rates?”

We currently sit at 0% inflation – teetering on the edge of deflation. Bank of England Governor, Mark Carney, announced at a conference in Frankfurt last week that the next move for interest rates will be up, but chief UK economist at IHS Global Insight added that a likely rate increase won’t occur before the early months of 2016.

“Whilst it is looking like low rates may be around for the next few months at least, they could vanish as quickly as they appeared so it is important that you seek the advice of a professional mortgage adviser who can give you advice specific to your circumstances,” concluded Oliver.

Treherne
Mortgages, On the Market

What does a Conservative government mean for housing?

So, the Conservatives have won the majority vote in Parliament and David Cameron is set to return to Downing Street as Prime Minister once again. But after this

somewhat surprising victory, how will homeowners, prospective buyers and landlords stand to benefit from the refreshed government?

Amid all of the parties’ manifestos, first-time buyers found themselves at the helm of attention. Labour pledged to give first-time buyers priority on new homes built for a period of two months and the Liberal Democrats proposed a ‘Rent to Own’ scheme where first-time buyers built up shares in their homes through renting.

The party that matters though is the Conservatives. David Treharne of Mortgage Advice Bureau looks at what the Tories plan on bringing to the table.

What have they proposed?

Their flagship policy, albeit a controversial one in the industry, is the expansion of the Right to Buy scheme which will see tenants of housing association properties receive huge discounts, allowing them to consider purchasing their homes.

1.3 million tenants could qualify for discounts of 35 per cent up to a maximum of 70 per cent up to a maximum of £102,700 in London and £77,000 across the rest of the country.

Help to Buy ISA

Announced in the Budget in March, come the autumn, hopeful and prospective homeowners will receive a Help to Buy “savings account” that will see the government top up £50 for every £200 saved towards a deposit, up to a maximum of £3,000.

Aspiring homeowners under a Conservative government would have access to a Help to Buy Isa, which would top up £50 for every £200 saved towards a deposit, up to a maximum top-up of £3,000. This was announced in the March Budget.

Only available for the next four years and being introduced in the autumn, the new savings account will only be available to consumers who are yet to buy their first home and will have no limit to how long people can use the accounts for.

First-time buyers based in London will be able to use the savings to buy properties worth up to £450,000, whilst the rest of the UK will see a ceiling of £250,000.

Discount homes for first-time buyers

David Cameron has pledged to offer up to 100,000 new homes to first-time buyers under the age of 40 at a discount of 20 per cent.

The ‘starter homes’ initiative has been created to encourage home ownership among young buyers and to boost construction of new homes by building on brownfield land – land previously used for commercial uses or industrial purposes.

While this means that, if you qualify, you will be able to afford a property that you would have previously struggled to, it should be noted that you will not be able to sell the home at full market price for five years after you purchase it.

A London Land Commission will also help release brownfield land owned by the public sector in the capital for building by promising a £1bn brownfield regeneration fund to unlock sites for around 400,000 homes.

With the general election now over and done with, new policies from the Conservatives will be coming through thick and fast which is why it is important to speak to a professional mortgage adviser who will have the latest information to help you through the mortgage process.