We are very excited by going live today with exclusive lender access to a new underwriting team. Their only mandate is to sign off “common sense lending!”. There is no underwriting policy, no formal affordability rules or hoops to jump through, just good old-fashioned underwriting. That really is a rare thing these days and to cap it off, the pricing is extremely competitive. So even if you feel you have a complex situation, this could well be a good home for you without having to pay over the odds for what you want to achieve.
This lender access is very much aimed at higher earners, as that logically gives you the wiggle room to use smaller deposits, or stretch the loan on the understanding there are bonuses to come/other income/other assets.
A refreshing and timely addition to our arsenal of exclusive lender access. As we are one of only a few brokers in the UK that can access this team, a real win for us and our clients.
House Prices Still Shooting Up
e.surv (one of the UK’s largest surveying firms) reported that house prices were up 4.4% year on year to October. This was also up 0.9% on the month previous, meaning there was a clear upward trajectory to prices. London is showing the strongest growth being up 2.5% in the last month alone and up 7.5% year on year.
Zoopla Figures back this up as they say we are having the busiest run up to Christmas in over a decade as sales are up 38%. They also anticipate that demand will rise further in January as people look to take advantage of the Stamp Duty holiday.
The Bank of England further supports these finding as they say that mortgage approvals are now 33% higher than in February and around 10 times higher while during lockdown!
This is something we have been very vocal about as if you want to take advantage of the stamp duty holiday, you need to move fast as all this increased activity is only going to create more delays in the house buying process! For more detail on that read our recent post here.
Spending Review Highlights
Seeing as we don’t do budgets anymore (and of course how could we being in the middle of a pandemic and no idea how Brexit will look), some relevant stats from Rishi Sunak last week:
- Biggest fall in GDP in 300 years… GDP is estimated to fall by 11.3% this year
- UK borrowing reaches a record high of £394bn
- The OBR (Office for Budget Responsibility) has warned a No Deal Brexit would push National Debt to 126% of GDP by 2025
- Freeze in Public Sector pay
- £100bn was announced to boost infrastructure spending
- A Cut of overseas Aid to 0.5% of GDP (down from 0.7%, and an election promise to maintain that level… but who is counting these days)
- Unemployment to peak at 2.6 million next year
- £2.6bn Work Scheme announced to help those affected by Covid to get back into work
- Funding set to increase to Scotland, Wales & Northern Ireland (£2.4bn, £1.3bn and £900m respectively
So that is all pretty cheery stuff… As alluded to above, until the vaccine for Covid is rolled out, and Brexit is clarified, we just don’t know how 2021 and beyond is going to look. Lets hope both aspects are resolved quickly and clearly so business and indeed ourselves, can start to plan the future better.
Market rates remaining quite flat at present. As touched on above and in previous emails, it is the capacity (and lack thereof) in the mortgage market which will drive pricing. That has been going up for months now and shows no real sign of reversing that trend, so we still feel keeping your mortgage options short term will save you the money money in the long run.
In the last week:
3 Month Sterling Libor = down by 0.006% to 0.041%
2 Year SWAP = up by 0.002% to 0.088%
5 Year SWAP = down by 0.006% to 0.260%
Bank of England Base Rate = Held at 0.10%
2 Year Variable from 1.19%
2 Year Fixed Rates from 1.04%
5 Year Fixed Rates from 1.32%
BTL Rates from 1.19%
The actual rate you will be offered will be dependent on your personal circumstance and deposit level. Please speak to one of our advisers so that they can guide you through this process
Source: Twenty7Tec November 2020
Photo by AbsolutVision on Unsplash