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House Prices, First-Time Buyers & Longer Borrowing Terms


Welcome to another week of fun and games in the property market.

It is shaping up to be another busy one, against the backdrop of plans for coming out of the latest lockdown, the Chancellors spending review on Wednesday, and increasing pressure on him to extend the Stamp Duty holiday.

There has also been some increased activity from lenders around cheaper rates, better criteria, and a plea from lenders to the regulator to allow lenders to come back into 90% LTV lending together without breaking competition rules.

Office for National Statistics, (ONS) House Price Data

Last week we saw the publication of the ONS data around house prices, which again showed that prices rose significantly, up 4.7% in the year-end to September.

This showed there are record highs all round but ironically, they’re not the main story right now.

News of a vaccine that few expected so early could transform the trajectory of the property market during 2021.

Whilst many were bracing themselves for a reversal in recent house price growth, the vaccine could provide a shot into the property market’s arm.

There will still be increased unemployment given the impact of the pandemic on the economy, but a vaccine could see sentiment keep its head above the surface, which for the property market is key.

For now though, there is still an acceptable flow of transactions that is being driven by landlords, holiday home buyers, and those with secure jobs and decent equity in their homes.

First-Time Buyers

For a while, first-time buyers looking to borrow at higher loan to values have been on a hiding to nothing, but there are signs that this is starting to improve once more.

Another couple of lenders have come back into the 90% LTV market which is good news, although without more support from other lenders we do not know how long this will be maintained.

What we do know is that there is some momentum slowly building, especially as it has been reported that the Intermediary Mortgage Lenders Association (IMLA) asked f the Financial Conduct Authority (FCA) for guidance as to whether current rules would allow multiple banks to return to 90% lending at the same time.

If this is allowed, it would mark a major turning point and bring good cheer for First-Time Buyers and the market as a whole.

Borrowing for Longer

Over the past two decades, the average mortgage term has increased materially as people work well into their sixties and often seventies.

The days when mortgages were all paid up at the age of 60 or 65 are now well and truly over.

Increasingly, and more so given rising house prices, people are taking on mortgages of 30-35 years and are therefore having to shoulder debt for most of their adult lives.

The days when people paid off their mortgage and then put their feet up for the next 20 years, with a pipe or gin in one hand and a Werther’s Original in another are well and truly over.

Best Mortgage Rates

In terms of mortgage rates, for standard residential mortgages, borrowers can obtain 2-year fixes at 1.18%, (3.00% APRC) and 5-year fixes from 1.38%, (2.60% APRC) whilst variable tracker rates are around from 1.64%, (3.30% APRC).

Those looking at Buy-To-Let can now obtain products from 1.22%, (4.80% APRC) for 2-year fixed or 5-year fixes are available from 1.62% (3.77% APRC).

To speak to one of our professional, friendly mortgage advisers contact us on 020 7220 5110 or send a message via our contact form.

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Andrew Montlake

Written by Andrew Montlake

Andrew Montlake, better known as Monty, began his journey with an Hons degree in Economics & Politics before starting in the mortgage industry in February 1994. As a main founder of Coreco in 2009, he successfully grew the brand, marketing, and communications, and was made MD in 2019 focussing on the overall vision, strategy, and culture of the company. As Coreco’s media spokesperson, Andrew can often be seen or heard on TV and radio as well as regularly commenting in the national, local, and trade press. He is the author of this acclaimed Mortgage Blog and is well-known for his social media, podcasts, and public speaking. Andrew is now proud to serve as Chairman of the Association of Mortgage Intermediaries, (AMI) as a cheerleader for the Mortgage Industry as a whole and continues to work at the coal face, writing mortgage business and advising clients.

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