Cost of Home Borrowing Reaches All Time Low, Will the Snap Election Affect Property, Plus More

Cost of Home Borrowing Reaches All Time Low

 The lowest ever mortgage rate, priced at 0.89% for two years, was launched last month.

Mortgage rates seem to be getting lower and lower and many predicted we’d soon see the end of the record low mortgage deals, however, Yorkshire Building Society has recently taken the record to an all-time low.

In early April, Atom Bank launched a 1.29% fixed five year deal - dubbed ‘the UKs best ever home loan’ - but due to its huge popularity it was removed from the market.

Shortly after Atom Bank pulled this offer, the Yorkshire Building Society introduced its record breaking mortgage deal at 0.89%, with many expecting other lenders to launch similar deals as competition. This two year discounted standard variable rate mortgage is restricted to people looking to borrow up to 65% of the property’s value and also comes with a &1,495 product fee.

A Yorkshire Building Society spokesman stated “We are very pleased to offer borrowers the lowest mortgage rate ever available. The cost of funding has fallen in recent weeks and, as a financially strong building society with no external shareholders to satisfy, we have the ability to pass this on to borrowers.”

Financial advice site Moneyfacts.co.uk has revealed that the average home borrower is currently paying &276 less when compared to this time last year and mortgage rates currently sit at their lowest in the last 29 years since records began.

Finance expert at MoneyFacts, Rachel Springhall commented “It’s fantastic to see such low rates on offer. Those looking for more flexibility over the shorter term may prefer a discounted deal, but those looking for some security could choose a fixed rate,”

Borrowers are being advised to be cautious when considering these new low mortgage offers and urged to read all the small print as some are coupled with quite large fees, however, experts believe this trend will continue and that we could see rates fall as low as 0.5%.

Martin Stewart of mortgage brokers London Money, also commented on the current state of mortgage products, he said “Lenders are fighting fiercely to get more customers on to their books and that’s why they are offering these ludicrously low mortgages at the moment”

Stewart added “Nearly all of them are behind on their lending targets and so they think they will attract more borrowers by slashing their rates. This is going to continue for the foreseeable future”

Snap Election: Will Property be Affected?

The housing market has weathered all kinds of storms over the last 18 months. Hikes to stamp duty, landlord tax relief reductions and Brexit have all threatened the market, but each one has been overcome.

The whole country was stunned last month, when Prime Minister Theresa May announced the country would go to the polls on Thursday 8th June. So how might the General Election affect the UK’s housing market.

Why now?
The Prime Minister’s decision to call a general election was a necessity, as she requires a strong parliamentary mandate for the upcoming Brexit Negotiations. Now that the Supreme Court has decided she needs parliamentary approval of the Brexit deal, the opposition parties now have the right to oppose the deal, as do the House of Lords.

The election contributes to the uncertainty generated by Brexit, however, if the conservative party are successful in increasing their majority, then it is predicted that we will see a greater economic and policy stability going forward.

Jeremy Leaf, former residential chairman of the Royal Institution of Chartered Surveyors (RICS) said: “...if the result is decisive either way, that will give the Government a greater mandate for its existing policies and is likely to result in a surge in activity in the housing market at least for the honeymoon period afterwards.”

However, Mr Leaf added "If you gamble and leave it until after the election, it could be a very different market; at least we know what the current market is like. You may make more money if you sell afterwards if there is a positive outcome, but you may need to pay more, particularly if you are trading up."

What affect has it had?
According to a recent survey conducted by eMoov, 57% of sellers said the election won’t stop their property plans. Only 18% of those asked said they would wait until after the election.

Likewise, buyers are still equally committed with 59% still going ahead with their purchase, and 18% saying they’re on hold.

Whilst there may be some short term uncertainty, property commentators believe that the election is unlikely to have any sort of significant negative impact - and could even mean a boost for the property market in the long term.

A Quarter of UK Tenants Would Not Inform a Landlord about Damage

 If you caused accidental damage to a property, would you tell your landlord? 27% of those asked in a recent survey said they would not.

One in four tenants said they would not inform their landlord if they caused significant damage to their rental property. Over 10% of those asked also said they would attempt to fix the issue themselves.

Damaged Property
58% of those asked said they would report any damages to their landlord, but 27% said that they would not.

Of the 27%:

• 11% would attempt to fix damages themselves
• 15% would consult a professional

• Fortunately only 1% would hide the problem and hope for the best!

Of the honest 58% of respondents:

• 24% would offer to the pay for the cost of the repair.
• 7% would contribute to the cost of the repairs.
• 27% would wait and see if they were required to pay.

When the results are filtered by gender, 13% of men believed they were capable of repairing the damage themselves, compared to 9% of women. On the other hand, women were more honest, with 26% saying they would tell their landlord as opposed to 21% of men.

Accidents will happen
Nick Marr, co-founder of TheHouseShop, the company who performed the survey, said: ‘While the vast majority of tenants will not actively try to do damage to a property, accidents do happen, and even well-meaning and reliable tenants can end up inflicting significant damage during their tenancy.’

 

The research gives an example of the potential pitfalls of trying to hide a problem and attempting a DIY fix. Emma Bannerman explained that her household in a rented property in London which suffered from water damage when a tap was broken during a party.

 

‘Unfortunately the DIY fix did not go to plan and we ended up almost flooding the entire kitchen. It was impossible to hide the water damage from the landlord so we owned up to our mistakes and ended up paying several hundred pounds more than we would have if we’d reported it straight away. Suffice to say we learnt our lesson and now report any and all damage, no matter how small,’ she added.

It’s better to report the issue to your landlord. Ignoring a small problem can lead to it developing into a full-blown disaster.

The Average House Hunter Spends 10 Minutes Before Deciding to Buy a Home

The process of buying a new home can be a lengthy one. The countless hours you spend educating yourself on industry jargon, researching areas, agonising over images of properties, alongside actually moving in, probably number in double digits.

Which is why it’s so surprising that the average Brit will decide whether they want to buy a home or not within 30 minutes of viewing it in person.

However, when it comes to buying a new car or sofa, it can take up to three times longer!

The findings of a recent survey found that the average home hunter will make up their mind within 30 minutes of a viewing, with 24% of those asked claiming they knew whether or not they liked a property within 10 minutes or less.

With the current supply and demand issues the UK property market currently faces, many buyers will likely feel the pressure of competition when making their decision.

When split into region, house hunters in the East of England were shown to be the most careful in their decision making, with the average minute of viewing totalling 32 minutes.

Buyers in the East Midlands were shown to have the biggest reckless streak with the average time spent viewing a property before making a decision equalling 25 minutes. They are closely followed by the South East (26) and Scotland (26).

 

The modern prospective buyer has a wealth of tools at their hand to prepare themselves for a viewing. With the help of a few google searches, they can compare values of properties in the area, check the quality of schools and amenities and even check crime reports. They arrive at the viewing fully prepared to make a decision, with only a visual confirmation of the property needed to push them over the edge.

Again, the house hunters in the East Midlands spent the least amount of time conducting research about their new home, spending 61 hours researching online. Whilst Wales proved to be the most prepared for their viewing spending an average of 83 hours researching property.