Posts with tag: remortgaging

Landlords to benefit from second charge market?

Published On: September 8, 2015 at 4:54 pm

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New research has indicated that remortgage or further advance customers could benefit from taking out a second charge loan.

V Loans estimates that this could be the case for nearly 10% of consumers.

Opportunities

The secured-lending specialist believes a mix of record law interest rates in the second charge market, coupled with the strong growth of the sector from 2011 gives an indication of the benefits for customers, alongside opportunities for brokers.

In addition, landlords could also be set to benefit from further competition in the buy-to-let second charge market, which could lead to significant price reductions. What’s more, this could make second charge lending a more attractive alternative to remortgaging, which could allow landlords to benefit from the heightened equity within their current portfolio.

On course to hit £750m in lending this year, the second charge market has seen year-on-year growth since 2011. Rates have fallen to record low of 4.05% above base rates, making the case for lenders to take out a second charge, while not causing any detriment to their withstanding mortgage arrangements.

With this said, V Loans predicts that only 50% of advisors promote second charges to their clients and as such is urging advisors to think of the benefits of these loans.

Landlords to benefit from second charge market?

Landlords to benefit from second charge market?

Best interests

‘Remortgaging or taking a further advance is not always in the client’s best interest and therefore it’s essential that all options are considered,’ said Marie Grundy, Managing Director of V Loans. ‘Interest-only customers, those benefiting from lifetime trackers and low fixed rate deals or those who do not want to incur substantial early repayment charges by remortgaging, including landlords who wish to release trapped equity, could all stand to benefit from second charge finance.’[1]

‘The pending alignment of regulation for first and second charge markets will deliver huge opportunities and innovation to the market allowing advisers to provide better customer outcomes. Intermediaries should seriously consider including second charges within their scope of service ahead of the regulatory changes next year,’ Grundy added.[1]

[1] http://www.propertyreporter.co.uk/finance/could-landlords-benefit-from-the-second-charge-market.html

 

Remortgaging activity up in August

Published On: September 8, 2015 at 12:57 pm

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Remortgaging activity in August was higher than all other areas of the housing market, according to a new investigation.

Research from Connells Survey and Valuation shows that remortgaging activity rose by 25% during the last month, in comparison to July. What’s more, the number of remortgage valuations is up by 102% compared to August 2014.[1]

Increases

Total valuation activity was actually more muted in the last month, with the number of valuations across all sectors rising by 7% from July.

‘Concern and media attention about an interest rate rise in the near future is the key driver of this surge,’ said John Bagshaw, corporate services director of Connells Survey and Valuation. ‘Due to the very low Bank of England base rate, there are currently some very appealing remortgaging deals on offer from lenders. But homeowners have been influenced by a powerful perception that these deals will not last.’[1]

‘Underneath the short-term surge, remortgaging is also driven by a longer term shift,’ Bagshaw continued. ‘People are increasingly looking to upgrade their home rather than trade-and so, for a slightly different purpose, are also keen to take advantage of cheaper mortgage deals.’[1]

Bagshaw believes that, ‘the wider picture looks encouraging stable,’ and that, first-time buyers and home-owners are far more optimistic about the housing market now than they were at this point in 2014.’ He feels that this is evident, ‘from the strong, steady growth we’ve been seeing throughout 2015.’[1]

Existing owners

The number of valuations for already existing owner-occupiers who are searching for a new home has risen by 3% since July. Home mover activity is up by 30% in comparison to August 2014. Similarly, the number of first-time buyer valuations in August rose by 1% month-on-month and by 30% year-on-year.[1]

‘Home mover and first-time buyer activity has been sizeable and speedy growth over the last six month, so a period of more stable growth is a sign of consolidation,’ observes Bagshaw. ‘It shows that these sectors command long-term momentum and demonstrates a more stable optimism from households about the future.’[1]

Remortgaging activity up in August

Remortgaging activity up in August

‘For those moving up the ladder, low mortgage rates are combining with property price growth as a basis for their next purchase. Meanwhile, first time buyers don’t have the benefit of this natural deposit, but are showing remarkable fortitude in the face of price rises-buoyed by a jobs market that is increasingly showing real wage growth.’[1]

The only part of the market to see a fall in activity during August was valuations for buy-to-let purposes, which fell by 5% month-on-month. However, the total number of valuations carried out for buy-to-let investors increased by 29% year-on-year.[1]

Popular

Mr Bagshaw believes that, ‘buy-to-let has retained its winning popularity with investors. The slight slowdown the sector experienced this month is likely due to some investors taking a step back to calculate the cost of the Chancellor scrapping certain tax exemptions for buy-to-let landlords in the Summer Budget.

‘However, the fundamentals of the rental market remain very strong, driven by tenant demand. Even buy-to-let-once a rollercoaster sector in terms of growth-is showing signs of settling into a positive pattern of strong and steady growth, a pattern replicated across many other sectors of the mort

[1] http://www.propertyreporter.co.uk/property/remortgaging-activity-soars-in-august.html

 

Accord buy-to-let range changes

Published On: August 14, 2015 at 9:23 am

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Accord Buy-to-Let has moved to assist landlords to manage the initial costs of buying or remortgaging by extending its range of £195 product fee mortgages.

Now, the fixed-rate mortgages will be available to landlords with LTV’s of at 60% and 65% and as such, will offer the opportunity to fix the rate for three or five years with the intermediary-only lender, which is part of the Yorkshire Building Society Group.[1]

Cashback

In addition, all house purchase mortgages will offer £500 cashback upon completion, with customers looking to remortgage benefiting from a free standard valuation and a choice of free standard legal fees or £300 cahsback on completion.[1]

For 60% LTV, Accord is offering a three-year fixed rate of 2.84% and a five-year fixed rate deal of 3.44% for house purchasing. Landlords looking to remortgage at 60% LTV can now get a 2.99% fixed-rate for three years or a 3.59% fix for five years. Additionally, landlords with a 65% LTV who are in the market for a new property can fix for 3.09% or five years at 3.74%.[1]

Landlords looking to remortgage at the same LTV have the choice between a three-year rate of 3.24% or a five-year rate of 3.89%.[1]

Accord buy-to-let range changes

Accord buy-to-let range changes

Cost-effective

Chris Maggs, Accord Buy-to-Let Commercial Manager, said, ‘we know that the upfront costs associated with both house purchase and remortgage can be off-putting when brokers are trying to find the mortgage which best fits their clients, so these competitive, lower-fee mortgages are designed to give different options for those who want to minimise initial costs.’[1]

‘The longer-term fixes will give landlords the security of a guaranteed rate for the next three or five years, which we think will prove popular with brokers and customers,’ Maggs added.[1]

[1] http://www.propertyreporter.co.uk/finance/upfront-costs-for-landlords-cut-at-accord.html

 

 

June a good month for BTL market

Published On: August 11, 2015 at 3:17 pm

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Categories: Finance News

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Latest figures from the Council of Mortgage Lenders suggest that June was a good month for mortgage activity, with positive news for buy-to-let.

Rises

Data from the report shows that first-time buyers saw a significant month-on-month activity increase in comparison to May, but little movement year-on-year. Home mover lending was also up by month and also slightly by year.

Significant movement was recorded by home-owner remortgage activity, which increased by a third both month-on-month and year-on-year.

As for buy-to-let, a steady growth was evident over the year and over the month, with buy-to-let remortgage activity the prime driver. Buy-to-let lending for house purchase has seen a stronger performance than home-owner loans, which is in part due to buy-to-let lending dipping more than home-owner loans during the economic downturn. Buy-to-let lending accounted for 17% of gross lending during June.[1]

June a good month for BTL market

June a good month for BTL market

Deals

Paul Smee, director general of the CML said. ‘notable this month is the uptick in remortgage activity among home-owners, perhaps reflecting an increased desire to lock into competitively-priced mortgage deals in advance of any rise in rates. It is likely that people are now beginning to feel a rate rise is a realistic prospect and not just a distant theoretical possibility.’[1]

‘After a slower than expected start to the year, lending now appears to be picking up as we expected and in line with our recently revised forecasts, ‘Smee added.[1]

[1] http://www.propertyreporter.co.uk/property/cml-june-sees-a-strong-month-for-buy-to-let.html

 

 

Mortgage approvals up by 8%

Published On: July 24, 2015 at 4:29 pm

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Latest figures suggest that high-street banks have seen a yearly increase in the number of mortgage approvals.

BBA’s figures for high-street banks indicate that year-on-year, approvals have risen by around 8%. In addition, remortgaging was 20% higher, suggesting borrowers are keen to secure current fixed-rate deals and gain more certainty for the short-term future.[1]

Pick-up

Data also shows that gross mortgage borrowing hit £11.5bn in June, which was 6% higher than at the same stage one year ago. Also, after a slow up in demand during the second half of 2014, overall mortgage stock is 1.1% higher than the same period last year.[1]

Richard Woolhouse, Chief Economist at the BBA noted, ‘the housing market is beginning to hot up again, as we’ve seen a pick-up in the number of mortgage approvals for the last month. Interestingly, we’ve also seen an increase in the number of people remortgaging, which could be down to savvy borrowers taking advantage of competitive deals on fixed mortgages ahead of a possible rise in interest rates.’[1]

Brian Murphy. Head of Lending at Mortgage Advice Bureau, commented, ‘a substantial leap in mortgage approvals this June suggest the housing market has once again stepped up a gear, building on the steady growth over the previous three months.’ Murphy believes despite the restrictive housing supply, ‘record low interest rates are helping to ease affordability concerns for those borrowers who can stump up enough money for a deposit.’[1]

‘As a result, lower earners are increasingly active in the purchase market and can borrow with the confidence that their finances are being thoroughly stress tested against the prospect of higher rates in future,’ Murphy added.[1]

Mortgage approvals up by 8%

Mortgage approvals up by 8%

Confidence

Mark Harris, chief executive of mortgage broker SPF Private Clients believes, ‘with the general election finally out of the way, strong lending figures demonstrate that confidence in the housing market continues to improve.’ Harris warns however, ‘the real growth in lending has been on the remortgaging side, with borrowers keen to snap up a cheap fixed-mortgage. With Mark Carney’s recent comments about a potential rate rise at the turn of the year, we expect to see significant growth in the number of people remortgaging in coming months.’[1]

‘While more people are enquiring about remortgaging, there are many who will sit on their hands and wait until interest rates actually start to rise. Anecdotally, the first rate rise is the trigger point for many people remortgaging but it may even be the second or third increase, as that is when there is a significant impact on a household’s expenditure and people then remortgage to ‘save’ money. However, by then the best fixed rates will have long gone,’ Harris concluded.[1]

[1] http://www.propertyreporter.co.uk/finance/mortgage-approvals-rise-8.html

 

Buy-to-let activity rises again in May

Published On: June 11, 2015 at 12:04 pm

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Categories: Landlord News

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A new report has indicated that May was another good month for the buy-to-let market, but first-time buyer activity fell once again.

Research from Connells Survey and Valuation shows that there were 33% more buy-to-let valuations conducted during May than at the same time one year ago. However, first-time buyer valuations fell by 4% over the same period.[1]

Month by month, buy-to-let valuations rose by 3%, whereas valuations for first-time buyers dropped by 2%.[1]

Ups and downs

John Bagshaw, Corporate Services Director of Connells Survey & Valuation, said that, ‘Britain’s buy-to-let market is booming right now as would be-landlords are eager to enter the sector and current landlords look to expand. However, for first-time buyers, May was not just less positive than the rest of the housing market, but also disappointing in comparison to the previous month.’ Bagshaw noted that, ‘previously, valuations for new buyers had proved resilient in April, even when uncertainty about the impact of the election result on home-buyers was at fever pitch.’[1]

Mr Bagshaw went on to say that, ‘the picture painted here is a consistent one. Fewer people looking to buy their first home means more tenants sticking to the rental sector. As such, new landlords enter the market and those already in the sector grow their business to capitalise on the increased demand. Yet what remains unclear is how long this contrast in fortunes will continue.’[1]

Buy-to-let activity rises again in May

Buy-to-let activity rises again in May

Remortgaging gains

The data from Connells also shows that May was a good month for remortgaging, with valuations up by 9% in comparison to April. In addition, there was a 31% increase in the number of remortgaging assessments in comparison to May of last year.[1]

Valuations for existing home-owners looking to move to a new property as opposed to remortgaging were up by 4% from April. This contributed to an 8% yearly rise in the number of home-owner valuations from May 2014.[1]

Bagshaw observed that, ‘remortgaging is going from strength to strength right now. Record-low mortgage rates are the main reason for this, and with inflation still near zero and flirting with a negative reading, the Bank of England is likely to play it safe and keep rates at bargain-basement levels for the forseeable future.’ However, he went on to say that, ‘the recent cooling in home mover activity points at another cause for the remortgage rush. Increasingly, home owners are opting to upgrade the property they already have, be it through a loft conversion, conservatory or major face lift, rather than sell up and get a new one. In short, people are improving not moving.’[1]

Secure

Mr Bagshaw feels that, ‘people feel financially secure enough to use their home as a guarantee against which to raise big capital-a sentiment that was absent for some time immediately after the crash. He went to say however, that people , ‘still don’t feel the property market overall is safe enough to risk trading up what they already have.’[1]

‘For a government reliant on movement further up the property chain to spur first time buyer activity, these lacklustre home mover figures will both partially explain the disappointment of the poor first time buyer results, and compound the problems,’ he added.[1]

 

[1] http://www.netrent.co.uk/may-sees-surge-in-btl-activity/