Keep Buying: House Price Growth Sign Of Healthy, Growing Economy

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House prices continue to rise in the UK. In London, prices have risen 11%, whilst in Cambridge and Bristol, 13% and 14% rises have been observed, respectively. Supply and demand is driving the rise. Behind the demand are several factors, including a rising divorce rate, which are creating the need for more single-person homes; as well as immigration and population growth.

Another reason for the price rise in UK homes is a combination of simple confidence and self-fulfilling prophecy. When people expect prices to rise, this causes increases to become a reality, causing even more confidence that prices will increase. Today’s reality is that market activity remains robust, despite predictions of a sudden drop due to economic uncertainty.

A Wealthier Feeling

Although higher house prices may seem like a negative thing, they are actually indicative of many positive occurrences. For example, higher house prices are a direct reflection of buyer confidence in their own financial stability. When a buyer feels wealthy and confident, they will spend more.

Homeowners can reap many benefits, including feeling as though they own a valuable asset, which they do. They can also ensure that this valuable asset benefits them well into retirement; when it’s time to downsize to a smaller home, the extra money from the sale can fund their retirement, or they can choose to enter an equity release scheme to produce needed cash.

Economic Resilience

Rising house prices mean that businesses are thriving. A higher turnover among small and medium sized enterprises in some UK cities has made them more prosperous. As well, this appears to be growing year on year. Another sign of economic resilience is coming from the charitable sector, which is experiencing a notable rise in charitable giving.

More Housing

As demand for homes in Nottinghamshire continues to increase, so too will the supply. Construction companies may need to hire more people to meet this demand, as well as obtain more materials, which fuels the growth of those businesses who supply the construction sector. More jobs and purchases only serve to strengthen the economy further, as well as address the severe housing shortage.

A Higher Return for Sellers

With demand for homes being higher than ever, sellers have a golden opportunity to get the best price for their homes. This is also a good time to either downsize by buying a smaller home, or purchase that dream home. Regardless what option is chosen, homeowners have the opportunity to spend their additional money on more assets or invest it, either of which will serve to increase personal wealth.

Lower Interest Rates Help

The Bank of England recently halved its interest rate from 0.5% to 0.25%, which has also significantly affected consumer spending. With such low rates, homeowners can increase their security by locking in a low rate. As well, these low rates mean that buyers can take their time to choose the best home for them, which translates into long-term security and a confidence boost.

The current housing market means that homeowners are in an ideal position to maximise their savings, whether they choose to do so by purchasing a smaller home, or by using the acquired value from a home sale to purchase additional investment products or assets.

www.wabarnes.co.uk

Great News For First Time Buyers As BOE Cuts Interest Rates To Historic Low

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Despite suspicions last month that the Bank of England (BOE) was going to cut its interest rates, the 0.5% rate remained. This month, however, the BOE surprised all by halving official interest rates to 0.25%. What does this mean for those who are looking to buy a home for the first time?

All-Time Lows

If you’re looking to purchase your first home, you’ll be excited to know that fixed-rate mortgages are lower than they have ever been. There is no better time than right now to see your lender and lock in that rock-bottom rate. Another benefit of the new rate for potential home buyers is that by taking advantage of low rates now, they can enjoy lower monthly mortgage repayments for the long term.

Perhaps the best news about the interest rate drop is, again, for first-time buyers. If this is you and your deposit is 35% or more, you will be able to get a 10-year fixed rate mortgage for an incredibly low rate, something the experts are calling a “once-in-a-lifetime opportunity”.

Those who are already homeowners but who are planning to move before their term expires can also get cheaper rates by switching to a mortgage without early repayment cost fees.

Stronger Position, Plenty Of Time

First-time buyers will enjoy this new rate for many reasons, not the least of which is the chance to be in a stronger position for negotiating deals than they may have been previously. Those who are still looking for their ideal home need not worry, however; with rates as low as they are and a market that’s currently quiet, they can both take their time and enjoy less home-searching stress and place a lower bid than they were able to just two months ago.

Yet another benefit of these new rates for the first-time buyer? They have the time and the flexibility to walk away from anything they don’t consider to be a good deal.

Competitive Mortgage Prices On The Horizon

Would-be first-time homeowners who are having trouble deciding on the best buy may no longer have to sit on their hands, if experts are correct. These low rates are already inspiring mortgage providers to price competitively, which will provide some reassurance to buyers that they’re not only getting the best home to suit their requirements, but are also getting the best possible mortgage price.

More Choices For First-Time Buyers In The Future

The UK’s continuing housing shortfall means that new home demand will remain strong. When combined with the Bank of England’s interest rate cut, this means that there will be more options available for homes. Those looking to invest in their first property will find this option to be even more attractive than other asset classes.

Know What To Expect

For people who are still saving for a home or who have an existing mortgage, the best thing to do is to look at your current situation to see if there is any way the new rate cuts can benefit you. Current mortgage-holders will be contacted by their lenders and told how the cut will affect their rate and payments, if at all. Tracker mortgages already linked to the BOE base rate will see a quarter of a percent, something that hasn’t happened in quite some time.

The bottom line about the new rate cuts is that first-time home buyers will have more opportunities than ever to choose their ideal home at a very affordable rate.

House Prices Slow Down But Are Still On the Increase

House Prices Slow Down But Are Still On the Increase

In the UK, property prices have been rising steadily for several years. One prediction is that just a decade from now, prices may be as much as 50% higher than they are currently. Although this seems like a lot, the fact that house prices rose an average 7.82% between 2013 and 2014 make that 50% seem far more likely to be reached less than ten years from now.

In the Midlands and the North of England, property prices are steadily slowing, meaning that in 10 years, the price of a property in London could easily reach a million pounds. Meanwhile in England’s South and East, property prices continue to accelerate. And amid all of these numbers, it seems that the benefits of investing in property in Nottinghamshire have gone largely ignored. There are actually many reasons for investing in property now.

The East Midlands Property Market Remains Lucrative

The UK’s property market is a primary driving force for the economy, and has always been a risky venture with all manner of peaks and valleys to prepare yourself for. But, it remains a lucrative venture, especially in the East Midlands, even if you only plan to invest in one property. Combined with low mortgage rates, this generates the perfect conditions for successful investing.

Tenant Demand on the Rise

For those looking to start a property business, a by-product of the continuing rise in house prices, as well as a desired change in lifestyle, are causing more and more individuals to look for lower payments by pursuing home and flat rentals. All told, the increase in tenant demand has been significant, with an average of five people competing for a single rental property. This increase is expected to continue.

As well, the increasing mobility of the workforce is seeing a higher number of people looking to share accommodation, which is both more affordable and allows for more money to be saved for a large property or other purchase in the future.

Benefits of Investing in Property

There are many benefits to property investment. Not only can you run a property business from anywhere in the world, but you can enjoy sustainable business growth that’s also profitable. As well, rents are currently at their highest in this country, which means ever-climbing yields for property owners.

For those looking to begin a property business, both direct and indirect investments are available. A collective property fund can allow would-be business owners to own property without the high cost. This is done by entering a pool of investors, from which a professional manager collects money and then invested into shares of property or in the property directly. Collective funds are available in many forms, including property unit trusts, REITs (real estate investment trusts) and offshore property companies.

Those who wish to purchase property for themselves can also enjoy many benefits. As current numbers predict, the value of a home will only increase over the coming years, which can mean a large return if the property is sold.

Is this information Enough to make a Decision?

Although the numbers are in, predictions about the property market have been made and the many benefits of property investing remain, some will inevitably wonder when is the best time to take the property investment plunge.

The truth is that now is as good a time as any to invest. But whether or not you do so is an individual decision. Investing in property does involve taking risks, but the key is to be satisfied with the level of risk being assumed, as well as to be able to manage that risk.

Property investment is not something that should be entered into lightly. Much consideration needs to be made before making the decision to invest. It may be that you need a professional to help you determine the best course of action before going forward.

www.wabarnes.co.uk

New Mortgage Options Expand for High-Value Borrowers

New Mortgage Options Expand for High-Value Borrowers

The housing market is expanding its options for borrowers looking for more range in their mortgages. New products and larger loans are now on the table for those looking to buy into property of a higher value.

The best-ever choice of mortgages for buyers

Banks and building societies are now offering high-value borrowers more appealing mortgage packages to draw investors and higher net worth home buyers into the property market. Interest-only mortgage models are making a comeback, with higher net worth individuals being targeted for this renewed option.

Interest-only Mortgages: a good option for high-value properties?

An interest only mortgage requires monthly repayments, but only enough to cover the interest on the mortgage amount borrowed. The loan value itself is not reduced, and the full amount of the loan will need to be paid back at the end of the loan agreement period. Though interest only mortgage options dropped in popularity after the 2008 financial crisis, high net worth borrowers are now more likely to benefit from an interest only or part and part mortgage.

The interest only model is seen as riskier by lower value borrowers, but for higher worth individuals, a complicated income stream or a collection of assets of a higher value might make interest only more appealing. Many interest-only mortgage loan options come with a lower initial deposit value, making it a potential option for those looking to spend less in the short term, and more in the longer term. It may well be suitable for those looking to buy a property to rent it out as a private landlord, before selling the property at a later date to pay off their mortgage loan agreement. This would make money and help savings in the short term, and be affordable in the long term.

Short-term Mortgages

Leeds Building Society has widened its range of financial products for high-value borrowers, making mortgage prospects more attractive. The financial institution now has a two-year interest only mortgage, offered at 1.6% for a loan to value ratio of up to 50%. It also offers a 1.7% two-year mortgage, part fixed rate and part interest only, for a loan to value ratio of up to 75%.

The new financial products are offered as an attractive prospect for those interested in investing in property, or perhaps for those buyers who expect a significant increase in their income in the future. If the home buyers are expecting to have saved a significant sum during the mortgage loan period, it may be a cheaper option for them in the short term only to pay off the interest on their loan, rather than using a standard repayment package.

The interest only mortgage is ideal for those seeking to invest in property, whilst the part and part mortgage might be more appealing to home buyers. The products are made even more appealing as they come with a free valuation, legal services with fee assistance for remortgages, and a fee of only £1,999.

Other banks and building societies that offer this type of mortgage loan can be found on the high street. TSB, Halifax UK, and Skipton Building Society are just some of the financial institutions offering interest only loans. Those looking to take out a mortgage loan should be aware of the potential requirements for this type of loans; for example, a minimum income of £75,000 per year in salary may be required before the loan can be offered. Before taking out a mortgage loan of this type, borrowers should consult financial advisors and be aware of the risks and rewards of this kind of mortgage option. It is also advisable to explore the options available from different banks and building societies to find the mortgage loan that best suits your needs.