Jade Buswell

Jade Buswell

Jade manages all the internal processes and human resources within UK Property Finance Limited. After many years working within the financial sector and working with qualified CeMAP advisors, Jade has gained a wealth of knowledge and ensures UK Property Finance fully complies with the FCA regulations whilst managing the larger customer accounts and partner relations. Jade has been shortlisted for the senior female executive award with The Women's Awards for the East Midlands and is a valuable asset to have onside when sourcing the best financial deals.

Price of Mortgages Predicted to Be £800 More Per Annum Than in October 2021

According to mortgage advisor L&C, people looking to remortgage their homes are expected to pay, on average, an additional £800 each year when compared to just five months ago.

The analysis was based on several parameters, using the example of a homeowner who had 40% equity in their property and was looking to take on a 2-year fixed-rate mortgage over a 25-year period on a mortgage of £150,000.

Figures provided by the Bank of England showed that applications for remortgage products rose in the last quarter of 2021 in proportion to overall lending. Market experts indicated that homeowners remortgaging the properties were hoping to grab a good deal before interest rates rose further, as they are predicted to do in the coming months.

Interest rates from major lenders were used by L&C, which were averaged out to create the analytic report.

The data showed that in October 2021, with interest rates at an all-time low, borrowers would be paying a little more than £557 per month on a 2-year fixed-rate mortgage deal.

If the same homeowner were to remortgage now, they could expect to pay around £627 per month, which will equate to an extra £70 monthly, which is approximately an additional £840 per year.

In some instances, good mortgage deals are only made available to borrowers for a very short period of time, often just days, and are then removed from the market. What homeowners need to realise is that they can apply for a new mortgage up to six months prior to the end of their current mortgage arrangement.

L&C also stressed that offers from lenders are typically valid for 3 to 6 months, giving the borrowers “Rates are moving quickly, though, and deals rapidly come and go, often only lasting a matter of days before being replaced with higher rates. Sufficient time to make an application despite the fact that an ERC (early replacement charge) may stay in place for several months.

Associate director at L&C Mortgages, David Hollingworth, commented: “Mortgage rates have been shifting rapidly as lenders are forced to adapt to the impact of market expectations of higher rates on their funding costs.

“The sheer pace of change is something that could take borrowers by surprise, especially when the cost of living and other outgoings such as energy are already rising too.

“Fixed rates are still at historically attractive levels, so borrowers should review their current deal to make sure that they are on the best deal and protecting their position, especially against a backdrop of rocketing outgoings and further potential increases in the base rate.

“Borrowers can lock in at a current rate up to six months ahead, giving them the chance to review well ahead and ensure a smooth switchover when their current deal ends. That could help them get ahead of any further rate rises.”

Average UK House Prices Hit New All-Time High in February

Economic uncertainty has become the norm as the UK continues to deal with the lingering after-effects of COVID-19. But while some sectors are struggling to get back to pre-pandemic performance levels, others are breaking records left, right, and centre.

Once again, average house prices hit a new all-time high in February, exceeding £260,000 for the first time. Data published by Nationwide suggests an astonishing 12.6% average annual growth rate for the month, taking house prices in most key UK regions to new record highs.

This is the largest year-on-year increase since Nationwide’s monthly index was launched in 1991, suggesting staggering performance for the sector despite the highest level of inflation in over three decades.

On average, the price of a UK home is now approximately £44,000 higher than it was before the pandemic hit, an increase of around 20%.

Supply continues to lag behind demand

According to Nationwide, issues with available inventory are the main cause of the past year’s record of property price increases. Demand continues to exceed supply in most areas of the UK, with affordable inventory having all but dried up entirely.

Meanwhile, house price growth continues to outpace wage rises, making it increasingly difficult for the average UK worker to buy their own home.

“The continued buoyancy of the housing market is of little surprise, given the mounting pressure on household budgets from rising inflation, which reached a 30-year high of 5.5% in January, and since borrowing costs have started to move up from all-time lows in recent months,” commented Nationwide.

“The squeeze on household incomes is set to intensify, with inflation expected to rise above 7% in the coming months,”

“Indeed, there is scope for inflation to rise even further as events in Ukraine threaten to send global energy prices even higher.”

“Assuming that labour market conditions remain strong, the Bank of England is also likely to raise interest rates, which will exert a further drag on the market if this feeds through to mortgage rates for customers.”

A positive picture for current homeowners

While the housing market is becoming increasingly inaccessible for first-time buyers, all-time record house prices are benefiting millions of existing homeowners.

“This performance really is quite alarming when you consider the wider economic turmoil that we’ve faced for some years now, and it proves that there really is no safer investment than bricks and mortar.”

“Even across London, where market conditions have remained far more muted, values have continued to climb, and the capital’s property market is now poised to enjoy an accelerated rate of growth over the coming year.”

Further monthly property price increases have been forecast by all major banks and lenders, though at a significantly slower rate than those recorded over the past year.

Property Market Shake Up as Cheap Fixed Rate Mortgage Deals Disappear

For the last ten years or so, buyers have enjoyed the luxury of low-cost mortgages, but this long-cherished privilege looks set to end.

2021 showed record-low fixed-rate mortgage deals of less than 1%, but these rates are officially over, with interest rates nearly doubling over the last six months.

In October 2021, home buyers could take out fixed-rate mortgages at a low rate of 0.79%; however, the cheapest you can get right now on a 2-year fixed-term mortgage has risen to 1.25%. In real terms, this would mean that on a loan of £150,000, you could expect to pay an additional £375 annually. The lowest rate on a five-year fixed-term mortgage has risen from a low of 0.91% to 1.59%, which equates to approximately £565 in additional costs per year.

Buyers have enjoyed low-interest mortgage offers since the end of the global recession, when the Bank of England significantly decreased the base rate. When the COVID-19 pandemic struck, the base rate was at a record low of 0.1% but has since been increased to 0.5% with the expectation that it will rise further in the immediate future as the cost of living soars.

As a direct result of this base rate hike, lenders have followed suit with many increasing fixed rates by up to 0.5%, including Virgin Money, Halifax, and Santander.

The expectation is that rates will continue to rise and could go as high as 2% by 2023. The UK hasn’t seen rates this high since December 2008. Those currently on low-cost fixed-rate mortgages will find it difficult to find an equally good deal when their current term comes to an end.

Imran Hussain, the mortgage broker at Harmony Financial Services, commented: ‘The sub-1 per cent interest rate is almost certainly a thing of the past.’

If the rate is increased to 2% by the Bank of England in 2023, this would mean that on a property worth £150,000 on a two-year fixed rate, monthly payments would be £711, and on a 5-year fixed rate, they would be £723.

A financial adviser at Carl Summers Financial Services, Scott Taylor-Barr, added: ‘Those who were lucky enough to secure a fixed rate at the historic low rates we saw last year have to be aware of what lenders call ‘payment shock’, which is when rates rise while you are insulated on your fixed rate and exit that deal into a much higher interest rate market.

‘All you can do is ensure you budget with a reserve to allow for an increase in payments when your deal ends.’

Lock in now: If you can

Approximately 75% of buyers are locked into fixed-rate deals that last between one and thirty years. Other homeowners are on variable-rate mortgages and are therefore subject to the rise and fall of interest rates. Should the Bank of England push the rate further to 2%, this would mean a property worth £150,000, with an average standard variable rate of 4.5, would have to pay £1,592 in additional costs per year.

Mortgage brokers are urging homeowners to do all they can to switch to a fixed-rate mortgage before we are hit with further interest rate increases if they can.

David Hollingworth, of L&C, says: ‘Taking advantage of the current crop of deals will help to weather the storm.’

He went on to say that many lenders will make mortgage rate offers that they will honour for up to six months, giving buyers and homeowners the opportunity to get a good deal before it’s too late.

Look into long-term fixed-term deals

Longer-term fixed-rate mortgages are becoming more and more popular, with the cost of a five-year fixed-rate mortgage not being much higher than that of a two-year fixed-rate deal. With this in mind, there is a trend among buyers to consider taking out even longer, ten-year deals. The best deal available on a 10-year deal is currently with Lloyds at a rate of 1.66%.

Dominik Lipnicki, director at Your Mortgage Decisions Ltd., says: ‘Many borrowers are not just concentrating on the lowest possible monthly payment now.’

Graham Cox, director of Self Employed Mortgage Hub, adds: ‘We’re finding borrowers who aren’t looking to move, locking in on a longer period of five or seven years.’

He did warn, however, that long-term rates are not always the best choice for every buyer, particularly if they have to move: ‘Although they will be portable, there is no guarantee you will meet the lender’s criteria then.’

Can a cheaper mortgage end up costing more?

A great number of mortgages have an early repayment fee, but lenders usually permit borrowers to repay up to 10% extra, penalty-free, every year.

By paying an extra £100 per month on a mortgage of £150,000 with a 1% interest rate, you could clear your loan almost 4 years early and save around £3,374. Although this may seem like a good move, it is vital that consideration of other debts be made first.

Mr Hollingworth stated, ‘Although the cost of living rise will cause many to rethink their budgeting, there could still be room for some overpayments to be made now while enjoying a low rate.

‘That will help reduce the interest bill and the mortgage balance to save money overall and to put them in a better position to cope with a potentially higher-rate environment when the current deal comes to an end.’

Should I pay to leave early?

It may be cost-effective to just pay the ERC (early repayment charge) if a low-fixed-interest rate mortgage can be found, but borrowers should calculate whether it is in fact worth it before making any commitment.

Managing director at The Mortgage Girl, Samantha Bickford, says: ‘A client on a great rate of 1.79 per cent with a year left came to me this week willing to repay the £700 exit fee to secure a new fixed rate deal for as long as possible.

‘We secured a deal at 1.89 per cent for the next five years to take him to the end of his mortgage term.’

But experts say rates are relatively low and are not likely to surge.

Rob Peters, principal at Simple Fast Mortgage, says, ‘We have had an unprecedented period of all-time low-interest rates. Those with highly leveraged debt burdens will be the first to feel the pain.’

 

February Sees the Biggest Rise in Property Prices for Two Decades

According to Rightmove, February has seen property prices increase by a whopping 2.3%, which is the highest rise in a month for 20 years. This brings the average house price to a record-breaking £348,804, an increase of £7,785.

Home prices are an incredible 9.5% higher than they were in the same period in 2021, signifying the biggest annual growth rate since September 2014.

Reports from Rightmove suggest that the reason for this price increase can be put down to the “fear of missing out” in the current competitive housing climate among both buyers and sellers. Agents have reported a 16% increase in inquiries from potential buyers.

Data shows property listings are up by 11% when compared to the same period in 2021, indicating that sellers are opting to list their houses for sale before finding a new property to buy.

When compared to January 2021, requests for home valuations were also up by 11%.

The highest annual increase in inquiries has been seen in the capital, and coupled with the biggest property price rises since 2016, London continues to lead the way. This is largely due to the end of the pandemic, resulting in a renewed interest in buyers returning to the city.

Marc von Grundherr, director of London estate agent Benham and Reeves, commented: “There have been numerous signs that the London market is starting to turn in recent months, and it is very likely we’ve now seen the back of the capital’s pandemic house price slump.

“The start of 2022 has been exceptionally busy, and buyer enquiries have shot through the roof as London home buyers try to get in quick and secure a purchase before house prices start to accelerate.

“It’s only a matter of time before this initial buyer demand and the sharp increase in asking prices start to filter through to completed sales, at which point we expect home sellers across the London market will further up their asking prices as a result of this growing market confidence.”

North London estate agent and former RICS chairman, Jeremy Leaf, said: “The market is continuing where it left off at the end of last year. Although Rightmove‘s figures are based on asking, rather than selling, prices, there still seems to be scope for further increases.

“Demand hasn’t been blown off course so far by the weather, rising interest rates, or inflation, as we have recorded a significant proportion of buyers who missed out in some of last year’s competitive bidding returning for another try.

“Listings are increasing, but not fast enough to satisfy appetites for houses in particular, which is inevitably reducing the number of transactions.

“Looking forward, stretched affordability will mean prices cannot keep rising at the same pace, but certainly there’s no sign of any significant softening yet.”

The UK Construction Industry: The Biggest Growth Seen for Six Months

According to the PMI (HIS Market/CIPS UK Construction Purchasing Managers’ Index), the construction industry across the UK has grown at its quickest pace over the last six months, with the demand for more developments going through the roof.

Data showed an increased growth of 56.3 in the first month of the year, up from 54.3 in December 2021, indicating a strong start to 2022.

The last year has seen significant growth month on month, with figures above 50.0 indicating an expansion of the construction industry.

The report posted that, due to continuing haulage and delivery issues, as well as shortages in construction staff, there have been significant delays in receiving goods from suppliers.

The report added: “However, the peak phase of supply chain difficulties appears to have passed as the latest downturn in vendor performance was the smallest since September 2020.”

When looking at the individual areas of the development industry, it was noted that the house building sector showed the slowest increase in growth in the previous four months with figures of 54.3, while civil engineering stood at a growth of 53.2, but the best performer at 57.6 was commercial development.

Tim Moore, IHS Market Director, said: “Residential work increased at one of the slowest rates since spring 2020, which is an early sign that cost of living concerns and rising interest rates could start to dampen the post-lockdown surge in spending.”

Brokerage XTB market analyst, added: “The UK construction sector continued to gain momentum after a difficult end to 2021 thanks to an improvement in commercial activity, which helped offset a weak rise in house building.

“Improvements were also helped by a drop in cost inflation, which fell to a 10-month low thanks to an easing of supply issues, which have been affecting the sector for months.

“As a result, commercial work helped construction growth reach a six-month high, but with supplier lead times continuing to lengthen in January as staff shortages and a lack of haulage availability hindered deliveries, the situation continues to be uncertain.”

On the 3rd of this month, the B.O.E.’s Monetary Policy Committee increased the base rate from 0.25 to 0.5 in an attempt to combat the increasing inflation rate. The current inflation rate is 5.4%, which is predominantly due to the massive price hikes in gas and electricity. Inflation currently exceeds the Bank of England’s target by a massive 2%. The inflation rate is expected to hit its peak at 7.25% in April, which is approximately 2% higher than was predicted back in November 2021.

 

Do I Really Need Family Life Insurance?

Life insurance is often overlooked as a seemingly superfluous expense. It is the kind of thing you hope you will never need and therefore assume you can do without.

Unfortunately, the financial complications that can accompany the death of a spouse or partner can make an already horrendous time in life practically impossible to negotiate.

Family life insurance provides priceless peace of mind for those closest to you in the form of essential financial support if the worst should happen.

What is life insurance?

Life insurance policies are typically finite, taken out over a specific period of time as required by the policyholder. The idea is that if you die or are diagnosed with a terminal illness during this time, a lump-sum payment is made to your spouse, partner, or family.

For example, if you take out a mortgage over 30 years, you may choose a similar life insurance term to ensure the debt will be covered.

In the event that a claim is made on a life insurance policy, the beneficiaries: For example, those you designate to receive the money can spend the funds any way they like. Most life insurance payments are used to clear outstanding mortgages and pay off other debts, though they may also be used to cover day-to-day living expenses.

Who needs family life insurance?

Family life insurance is considered essential when debts are taken on (such as a mortgage) that would be difficult or impossible for your family members to cover in the event of your death.

Likewise, family life insurance provides an essential financial safety net to cover essential living costs if the policyholder, who is the primary financial provider for the family, dies during the policy term.

All family life insurance policies are tailored in accordance with the income level, outgoings, and general financial situation of the policyholder. An effective life insurance policy will ensure that the beneficiaries named in the policy are supported financially. This will include debt repayment and living costs in the event that the policyholder dies.

How much does family life insurance cost?

Family life insurance policy costs vary significantly in accordance with the financial status of the policyholder, the length of the policy, and the extent of the coverage required.

It is technically possible to take out life insurance starting at around £5 per month. As a general rule of thumb, however, the lower the monthly premium, the lower the payment received by the policy’s beneficiaries if a claim is made.

Life insurance costs are also influenced by factors such as the applicant’s age, occupation, lifestyle, smoking status, medical history, and so on.

Is family life insurance really necessary?

The short answer is yes: family life insurance provides essential financial support if the worst should happen and priceless peace of mind if it doesn’t.

Nobody knows for sure what may be around the next corner. The fact that most life insurance terms pass without a claim being made does not mean it is a facility that should be overlooked.

Life insurance is all about taking care of those closest to you if you are no longer able to do so personally. There are policies available to suit all budgets, and the peace of mind that comes with quality coverage is often worth the low monthly premium alone.

How to Sell Your Home Faster and For the Best Possible Price

Selling a home in the current climate should not prove too much of a challenge for those looking to relocate. Record demand across much of the UK has created an unprecedented sellers’ market, with prospective buyers competing ferociously for quality homes.

Still, there are always steps that can be taken to speed things up further. Not to mention, ensure that, when your home sells, you get the best possible price for it.

With this in mind, here are a few simple yet effective ways to ensure the fastest sale for your home in 2022:

  1. Advertise it yourself

Even if you have hired an agent to sell your home, you can still advertise it yourself via multiple channels. Social media, in particular, can be a surprisingly effective platform for listing homes for sale. The more places you advertise your property, the faster it is likely to sell.

  1. Get it staged professionally

A professionally staged property almost always sells faster and for a higher price. Hiring a home-staging company may seem like an unnecessary cost, but it could pay dividends. The services of freelance home stagers are always readily available online.

  1. Focus on first impressions

Think carefully about the first things prospective buyers will see when visiting your home. This usually means things like the driveway, porch, front door, and surrounding exterior, all of which must be in pristine condition and perfectly presented.

  1. Apply a fresh coat of paint

Time and time again, this has proven to be the most cost-effective way to boost a home’s appeal and market value. Go for something neutral to create a blank canvas, upon which prospective buyers can visualise how they would like to decorate each space.

  1. Focus on the kitchen and bathroom

It is the practical spaces within a home that tend to attract the most attention and scrutiny. If you are going to invest time, effort, and money in renovations, be sure to focus on the kitchen and bathroom. The kitchen, in particular, can be the ultimate make-or-break factor.

  1. Consider hiring a photographer

Nobody is going to visit your home if it does not look the part online. The photos you publish could play a major role in determining if, when, and for how much your home sells. Unless you know exactly what you are doing, hiring a photographer could make all the difference.

  1. Comprehensively declutter

Removing as many personal items as possible makes it much easier for prospective buyers to see themselves living in your home. Likewise, getting rid of as much clutter as possible helps enhance this ‘blank canvas’ effect you are looking to create.

  1. Consider the alternative options available

Alternatives to conventional property sales can also be considered in time-critical scenarios. Examples of this include selling at auction, selling for cash to a specialist property-buying company, and so on. All of these should be discussed in advance with an established broker in order to ensure you fully understand the pros and cons.

What Can We Buy to Let Landlords Expect in the Year 2022?

With a slowdown in house price growth, increasingly expensive mortgages, and more stringent regulations, what is in store for landlords for the year to come?

2021 saw a boom in house prices, increased rental costs, and record-breaking low-interest rates, creating an ideal environment for landlords across the UK. With the average house price rising by £23,902 over the last year, many landlords opted to sell their properties, resulting in large capital gains for them.

With demand exceeding supply for rental properties, rental costs have increased to rates not seen for the last thirteen years. Even with the increased tax levies, buy-to-let investors have had a very lucrative year. There are, however, some potential hurdles to cross in the year to come.

Changes to regulations require landlords to make the necessary adjustments in order to make their properties eco-friendly, and there is also the proposition of the scrapping of no-fault evictions.

House prices to stabilise

Since the onset of the pandemic, house prices have risen by an average of almost £34,000, with the highest growth since 2006 in the last three months. This has resulted in many landlords benefiting from the increase and making the decision to either sell, remortgage or release equity.

Sales director at buy-to-let lender Shawbrook Bank, Emma Cox, said: ‘Despite the hurdles caused by the pandemic, the market has stood firm, and house prices have continued to soar in price.

‘This has created attractive opportunities for investors, whose confidence in the market has grown over the last 12 months. Their buying activity and trends show that the market is likely to remain strong over the short term.’

It is largely dependent on whether demand exceeds supply and whether house prices will continue to rise in 2022.

Nathan Emerson, chief executive of Propertymark, said: ‘Whilst buyer demand is expected to follow usual seasonal trends and take a dip over the festive period, agents are not seeing any signs that demand will slow in 2022.’

He suggested that any more tightening of supplies would result in a dampening of the market later in 2022.

‘Many sellers wait to see something they like and will market on account of having found it.

‘Without an enticing catalogue of potential new homes, pipelines risk becoming starved heading into spring 2022.’

According to Halifax, house prices are only expected to rise a further 1% over the next 12 months; however, both Hamptons and Savills are predicting a rise of 3.5% on average.

Rent amounts are expected to rise

With intense competition for rental properties, buy to let investors have cashed in by increasing rental charges. The number of available rental properties over the past year was down 43% below the five-year average, massively increasing the competition amongst renters to secure the property.

2021 saw a typical rent increase of 4.6% year-on-year from September 2020, with an 8.6% rise outside the Greater London area, a level not seen for 13 years.

Policy director for the National Residential Landlords Association, Chris Norris, said: ‘2021 showed some signs of recovery for the private rented sector, which tends to be counter-cyclical in nature, with economic uncertainty leading more people to rent rather than commit to large purchases.

‘Demand for rental accommodation increased across the UK, with some early indications that tenants are also returning to London after many left during lockdown.’

Estate agents are warning of many landlords leaving the market, causing a shortfall. This is also partly the result of the upcoming changes in regulations for buy-to-let investors.

‘Looking into the private rental sector, rental income is poised to remain strong as demand holds steady,’ commented Emerson.

The continued fight against COVID-19 will also have an impact on the future of the rental market.

‘The fate of rental markets in the next 12 months will rest upon the COVID-19 pandemic,’ Emerson adds.

‘Heading into winter, there is an anxiety about the Omicron variant with the UK Government moving to Plan B measures.

‘This could push a new wave of movers as people look to change their surroundings, or we may see more wanting to stay put until life feels more certain.’

Stamp duty surcharge

Although the 3% stamp duty surcharge was still required to be paid by buy-to-let investors, landlords still made significant savings during the stamp duty holiday. According to a report by Hamptons, landlords who invested during the initial stamp duty tax relief saved, on average, the equivalent of around three months rent. The 3% surcharge will, now that the tax relief has come to an end, put off some buyers from investing in rental properties.

Emeritus professor of housing economics at the London School of Economics, Christine Whitehead, said: ‘Our work on taxation of landlords across Europe suggests that as a result of the changes in taxation since 2015, individual landlords in Britain are being increasingly disadvantaged when compared to corporate landlords and other investment types.’

Increase in mortgage rates

Tax blows dealt to landlords over the last few years have been somewhat softened by the competitive and cheap mortgages available to them. With the high expectation that interest rates are set to rise in 2022, it is thought that some potential landlords will opt not to invest as future profit margins will be lower.

The Bank of England has already increased the base rate from 0.1% to 0.25%, with more rises expected in the near future.

Chief capital officer at the mortgage lender, Swen Nicolaus, Molo, says: ‘Next year could bring many things to make landlords nervous. The very strong inflation we have seen in 2021 will be a priority for the Bank of England to tackle.

‘With the base rate forecast to rise and mortgage rates potentially following it up, it will create challenges not only in higher mortgage payments for those not in fixed rates but also for affordability requirements for those looking to purchase or refinance.’

London renters returning to the capital

The pandemic led to many renters making the decision to move from London to the suburbs as priorities in the type of property in demand changed. This led to a panic amongst landlords in the capital, resulting in a drastic decrease in the cost of renting city property. Rentals had fallen by up to 12% by January 2021.

The market in London is steadily recovering, with many people returning.

Propertymark’s Emerson stated: ‘In the first half of 2021, there was a mass exodus from cities as tenants turned to rural and coastal areas in search of a more relaxed and spacious lifestyle.

‘In the second half of 2021, we have seen the return of students and some work forces back into cities; however, many returned to find landlords had sold and the availability of homes was far less than usual.’

Updated EPC regulations

With more and more regulations and loopholes for buyers to navigate, it is not surprising that they are somewhat put off investing. The EPC proposals will mean that stricter regulations will need to be complied with by a certain date.

Landlords currently need to achieve a minimum rating of E on their energy performance certificate and will be required to perform annual gas safety checks. This will increase to the required rating of C by 2025 in order to try and achieve the government’s net zero carbon emissions by 2050.

Rob Bence, co-founder and chief executive of landlord forum Property Hub, says, ‘I think the changes in EPC regulations will be a hot topic in 2022.

‘As it stands from 2025, all new lets, irrespective of the age or location of the property, will likely need to have a C rating.

‘This is due to be rolled out to existing tenancies in 2028, but there are murmurs that the government is planning to extend the deadline for new lets by one year to 2026.

‘Either way, transforming Britain’s rental stock to meet the government’s targets is a big challenge for landlords.’