As the election campaign gets into full swing and we look forward to the hot air and political rhetoric that goes with it, the mortgage market at least seems to be enjoying the Easter holidays with rates ticking down again.
After a brief hike upwards, SWAP rates, upon which many lenders base their fixed rate products, have decided to ease down again, giving some lenders the room to put out some more good products.
It is amazing how quickly borrowers take such good rates for granted nowadays, expecting 2 year fixes below 2% and 5 year fixes below 3% as a given. Luckily, there is plenty of choice in these areas and we are delighted to have access to a 5 year fix at just 2.19%, (3.30% APR).
Meanwhile, there has been a lot of media coverage about the new pension changes that are coming into force, allowing people to get at their pension money without having to buy a pesky annuity. One of the biggest expectations is that instead, many will look at property as a good investment for the future.
Attracted by the prospect of not just a regular income, but also a potentially increasing asset, it seems we will see an increase in this type of behaviour from clients, although the reality is that they will still need to carefully calculate their tax position if they were to cash in more than 25% of their fund.
The good news is that Buy To Let rates have also come down to historic lows and with 2 year fixes from just 2.09%, (4.60% APR), 5 year fixed rates available from 3.29%, (4.40% APR) or a nice stable 10 year fixed at 4.99%, (5.10% APR), it is certainly attractive.
It is an exciting opportunity for a new wave of investors, now known as “Granlords”, looking for a different way of earning income in their retirement.
It will be interesting to monitor the situation and I would advise anyone looking to do this to speak to a professionally qualified independent adviser to make sure they have the right advice.
With the weather expected to get better in the coming few days it looks like it could be a busy time on the property front, election or not.