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The Latest from Chris Hope

Recently, our Senior Partner Chris Hope was asked a few questions regarding the recent election results and about his experience managing people.

Question 1: A reporter seeking reactions to the recent election results and the new Conservative majority government –

Chris Hope: “From my prospective, the property industry is a clear barometer for the country in general and therefore, if the carefully controlled conditions for growth over the past 2 years can be replicated for the next 2 years, clearly the government housing and financial decisions were correct ones.”

Question 2: As a manager of people within an organisation should you close the door? Yes, no, sometimes?

Chris Hope: “Absolutely sometimes. In this day and age, it’s vital that specific messages within some conversations are totally clear and not left to interpretation. For some occasions, delegation is suitable.”

Keep your eyes peeled in the next month for the full articles. For more information about Dawsons and our Visit our main property site

Oliver Adair MAB

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.


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.


Overpayment – is it something worth considering?

With the ongoing mortgage rate war, there is some debate over whether now is a good time to pay off your mortgage early. Here the UK’s leading independent mortgage broker, Mortgage Advice Bureau, discusses the ins and outs of early repayments and overpayments.

“Credit cards and unsecured loans are prime examples of debts that charge high rates of interest, with some having interest rates that are much higher than that of your mortgage. It is always more beneficial to pay off these sorts of debts before considering paying off your mortgage, being mindful to not revert back to them once you have paid them off,” said David Treharne from Mortgage Advice Bureau.

Those contributing to a pension scheme may also be considering using their savings to pay off their mortgage a little earlier. The government now tops up your contributions with tax relief, and if the company you work for participates in specific pension schemes, they may also match your payments into a pension pot.

David added, “The sooner you begin to pay into a pension pot, the quicker your retirement pot will grow. So, if you find yourself with money to spare, it may be worth considering using your savings to add to your pension for the future rather than pay off your mortgage early.”

Have you thought about what the monetary consequences would be for your family if you were to pass away? If you have dependants who rely on your income to cover your mortgage, life insurance can help provide for them if you were to die, so this may be something worth putting your spare money into instead of paying off your mortgage.

If you are serious about overpaying your mortgage then it is important to consider any charges that may be incurred. Ensure that you check your mortgage deal carefully, you may need to pay an Early Repayment Charge (ERC), though some lenders allow you to overpay by up to 10% a year without any penalties.

“When interest rates are as low as they are now, overpaying on your mortgage will mean that you will have a smaller amount to be charged on when rates do eventually rise. It doesn’t just mean that you may have to pay less in the future, you could possibly pay off your mortgage completely – sometimes years earlier than the original end date. With prices constantly changing, it is important that you seek the advice of a professional mortgage adviser who can talk you through what is right for your personal circumstances,” concluded David. Continue reading