In our line of work, as with most people’s work I suspect, having issues come up on your cases/workload are normal, currently we keep dealing with ‘zombie mortgage deals’. Any client-based work is the same regardless of the sector you work in. Everything ticks along nicely until, bang, you get an email that harpoons weeks or months of work.
Well, mortgages are very susceptible to this. Firstly, you have lenders that are being very difficult at present. While it is extremely frustrating, we do understand why that is the case. Not only have we got the fall out of Covid to try and figure out. That is both in terms of impacts (or not) to our clients and also the resulting lack of capacity and increased work that has created for lenders. There are also different rules on residency for many clients post Brexit which lenders are also having to adapt to.
Secondly, you have a booming housing market and a Stamp Duty deadline that is looming large and for most, if not all our clients, things slipping to the 1st July will cost them £15,000 so tensions are higher than usual.
So put these things together, any little issue feels big at present. Being a mortgage broker is a classic situation of giving the impression of being like a Swan. Smooth, graceful exterior, while peddling like mad under the surface. Issues are commonplace in our work as documents are often lost or misinterpreted by lenders. Cases are sometimes declined or rejected, only for us to resolve the issue before our clients are even aware there was an issue. To be blunt, that is what we get paid for so that is no issue. It is our job to make our clients lives easy after all.
But currently, we keep getting ‘zombie mortgage deals’, ones where issues come up time and time again. You duly kill the first issue and move on confident it is put to bed. Then like something out of a horror film, the issue is resurrected, or something else comes up. You feel like that scene in a film where you see the body slowly coming to life in the background, and the realisation things aren’t going to be easy, as the lead character turns around slowly only to see the monster come back to haunt them again…
I appreciate that this is a strange analogy, and many of you may not even care about the inner workings of mortgages, and ‘zombie mortgage deals’, but for those that do, this may resonate as my friends in other walks of life seem to feel the same. It also just goes to show how valuable we are in the process of buying or refinancing a property at present!
Core Principles of Lending
As touched on last week, I am doing a 3-part series on the Core Principles of Lending. The second aspect is – Commitment.
In modern day parlance this would be referred to as your Credit Score. I also talk over things like how underwriters make decisions on loans, what data they look at, what is deemed good/bad and many things that may not seem obvious to the lay person.
If you want to have a more detailed look at this area, please click this link which has this and much more.
Rental Income Analysis
The Mortgage Works (TMW), the Buy To Let arm of the Nationwide Building Society, released some really interesting data on rental income this week.
A link to the report is here which talks over the trends in Q1 2021.
Interesting to note that the average rental income in London was £61,000 pa or £5,083 per month, but that was actually second to Wales! Where the average was £69,000 or £5,750 per month. The South West had the highest average yield at 6.7%. 40% of landlords report of rental income increasing, 31% say there was no change, and just 10% saw falling rents.
As such a large lender in this sector, this is quite a useful guide to the trends in the market that you are likely to be seeing.
We Want To Hear From You!
To keep the positive vibes flowing, we would love to hear from you if we have helped you with your mortgage. It would mean a huge amount to me, and the broker that helped you, if you would be as kind as to send a picture of you in your home with a few words about your experience? Or Better still, a short video talking over how we helped?
We would love to use this on our social media as nothing is more powerful than your own experiences which we can learn from, and share with others. I know our British reserve makes this very unnatural for us, but I would really appreciate it.
Feel free to WhatsApp/Text me directly on 07825 525595, which is often the easiest way to do this, or feel free to reply to email and we can collect the info that way.
Market rates pretty flat again as they reversed the movements we saw last week. We are still seeing many lenders reduce the interest rates on their products, especially if you have a smaller deposit.
So our default position stands, unless you have any specific needs, we would most likely recommend a longer term fixed rate if you have a 25% + deposit, but keep it short term or flexible if less than that figure.
In the last week:
3 Month Sterling Libor = up down 0.002% at 0.081%
2 Year SWAP = down by 0.003% at 0.300%
5 Year SWAP = up by 0.022% to 0.704%
Bank of England Base Rate = Held at 0.10%
2 Year Variable from 0.99%
2 Year Fixed Rates from 0.99%
5 Year Fixed Rates from 1.21%
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 May 2021