UK Property Finance Shares Useful Insights for British Borrowers

One of the UK’s most successful property finance brokers has recently advised potential home movers and those in the Buy-to-Let industry that the best time to apply for a long-term secured loan product is right now. The primary reason for this is that the present low cost of borrowing is definitely not something that they expect will last, although there is still time to act for those who are considering taking out a mortgage product in the interim.

With an already noticeable increase in the number of banks and high street lenders starting to raise their rates, the trend is practically guaranteed to continue with several more lending facilities having recently confirmed that they too will be upping their previously low interest rates for those seeking to borrow throughout the course of next year.

Affordable property finance for UK borrowers

“As whole of market property finance brokers, we have unrestricted access to the most extensive panel of mortgage providers out there, which means we can offer our clients the most appropriate products with the most competitive rates from across the entire market of mortgage lenders. In the simplest of terms, this means that we will actively seek out the most suitable and affordable product on your behalf, based on your individual needs and circumstances.” – UK Property Finance

According to leading economists, the expected level of increase is not something that should start to spike significantly until the onset of the 2020s, although they do predict a steady rise that will increase on a yearly level. With this in mind, the team at UK Property Finance are advising their customers that the time to refinance or take out a new secured loan product with the lowest possible interest rates has to be in the present moment.

UK mortgage rates managed to hit an all-time low in June 2016, with HSBC offering one of the market’s lowest ever loan deals with a 0.99% product aimed at borrowers with minimum deposits of 35%, although the mortgage deal has since been removed. This record-breaking high street mortgage deal was then beaten by the Yorkshire Building Society’s 0.98% product, which, unlike HSBC’s predecessor, is still available – at least for now.

Low-Cost mortgages from an experienced broker

“UK Property Finance has operated in the role of an experienced mortgage broker for well over a decade, and we have provided innovative finance solutions for thousands of highly satisfied borrowers across the UK within that timeframe. Whether you are looking for independent advice on mortgages, insurance policies or anything else related to the funding of a property purchase, our team is vastly knowledgeable and always available to provide quick and uncomplicated access to the precise loan product you need.” – UK Property Finance

With a steady rise in the number of low-cost mortgage products now being withdrawn from the market, and with interest rates on so many other property finance products set to escalate, acting quickly is quite simply the only realistic and plausible solution for those seeking to save money by means of taking advantage of present day low interest rates. This is particularly true for those investing in fixed term products, which promise low interest rates that are to all intents and purposes set in stone for the next two to five, or even ten years, depending on the lender. Work out the costs of a mortgage using our Mortgage calculator UK

If you are looking to save money on a low interest mortgage or refinancing deal then UK Property Finance are always willing to help. With so many vastly differing mortgaging products and secured loan types to choose from, finding the most practical and beneficial solution to the problem of raising appropriate funds to finance a purchase – or release the equity in your home, is to take advantage of the services offered by an experienced broker. Instead of searching yourself, let UK Property Finance source the most affordable and appropriate deal on your behalf.

 

It wasn’t long ago that it seemed as if an unprecedented spike in buy-to-let investment interest was here to stay. Investors at all levels were going crazy for the kinds of low-interest financial products never previously made available, spelling good times for property investors, bad times for first-time buyers on the lookout for affordable inventory.

However, ‘here to stay’ it just wasn’t to be, as figures compiled over the past few months have shown a trend in landlord landing that’s actually gone into reverse. According to figures shared by the Nationwide Building Society, the buy-to-let boom seems to have come to a screeching halt. Whereas the six months running up to September 2015 saw total buy-to-let borrowing of £2.9 billion, the figure feel to £2.8 billion for the same period this year. That’s according to the Mortgage Works, the buy-to-let subsidiary of Nationwide.

Why the sudden slowdown? Well, the lender stated that new affordability tests being rolled out across the industry are quite simply making it more difficult for landlords to gain access to the capital they need. This, in accordance with changes to tax relief set to go live next April, which could make the buy-to-let industry far more expensive for thousands of landlords.

“The buy-to-let sector is going through a period of substantial change resulting from new rules on landlord taxation [and] guidance on underwriting and affordability standards,” said Nationwide chief executive Joe Garner.

For borrowers looking to work with Nationwide, the prior 80% of the property’s value the borrower could apply for has been cut to 75%, while the minimum qualifying rental income of 125% the mortgage payment has been significantly hiked to 145%. This in turn has made it impossibly expensive to borrow for buy-to-let purposes in the UK’s higher-price property markets, including London.

And it’s not only Nationwide that’s clamping down on buy-to-let borrowing. Barclays and Santander have both announced the implementation of tougher lending restrictions for landlords, which over the coming weeks will make it harder and more expensive for investors to snap up properties.

On the plus side for property owners, Nationwide predicted that the coming year will see a gradual increase in house prices, though at a relatively modest pace.

“A less certain economic outlook may soften demand, but prices will continue to be supported by low interest rates and limited supply of new homes,” the bank stated, predicting rises of between 3% and 6% over the coming 12 months.

As buy-to-let lending via conventional channels becomes increasingly difficult and expensive, it’s hardly surprising that more investors than ever before are considering alternative options. The past few years have seen an enormous spike in bridging loans applications and general interest, from those looking to access the capital they need in a manner that’s fast, affordable, convenient and flexible. Once again, the tightening of borrowing restrictions by banks is expected to drive more customers the way of bridging loans providers than ever before. Work out the costs of a mortgage using our UK mortgage calculator

To look at the picture over the past year or so, you’d be forgiven for thinking that rock-bottom mortgage rates were the new norm. Which indeed they were, with the vast majority of major lenders having slashed mortgage rates to all-time lows, resulting in a huge spike in borrowing accordingly.

Unfortunately, it was never going to last forever…even if it seemed like it might for a while. Spelling the end of a global era of ultra-low rates, banks and building societies across the UK and much of the rest of the world are slowly but surely increasing mortgage rates. To highlight just a couple of examples over the past couple of weeks, West Bromwich scrapped its market-leading 10-year fix, which charged just 2.59%, while Skipton increased certain mortgage rates by just under 0.4%.

Other lenders have also followed suit, including Virgin Money. Known to be one of the most affordable and accessible lenders for first-time buyers, a number of mortgage packages that previously asked just 5% in deposit payment now require a 10% deposit.

On the whole, industry experts have stated (and have indeed stated for some time) that in terms of it becoming more expensive to borrow cash to buy a home, it’s a definite case of when, rather than if.

But why is it that rates will and are already rising in some instances?

Well, it all comes down to the way in which mortgage rates in the UK are influenced in a big way by what happens in the rest of the world outside. Suffice to say, the surprise election of Donald Trump created the kinds of global shockwaves that are having a profound effect on global markets, which inevitably feed back to mortgage rates and interest rates in general in the UK.

Since the shock result was announced, mortgage rates have on average spiked by a pretty significant 0.4% in the United States, experts expecting British mortgage rates to increase at a very similar rate. In terms of when things will begin to take an even bigger turn for the worse, it’s largely expected that it will be a relatively slow and steady climb that won’t necessarily impact those looking to borrow over the next year or two too heavily. It’s simply a case of being aware that each of the records that were broken this year (in some cases interest rates lower than 1%) have been confined to the history books and aren’t going to be happening again in the foreseeable future.

On the plus side, interest rates on certain mortgages and financial products are still considerably lower than they’ve been in a generation. Which in turn means that for those looking to borrow or invest in the near future, the pickings are still more than rich enough to indulge. Procrastination, however, could see borrowers paying through the nose. The increases that are coming soon may be relatively minor, but they’re still increases. And they’re still coming…soon.

A recent dataset published by HMRC has shown that April’s stamp duty rise has hardly had any effect at all in terms of deterring new and existing landlords from buying up properties.

In fact, summer 2016 has been an extraordinarily busy time in the buy-to-let sector, with almost 25% of all residential properties sold in this period being bought either as secondary residential homes or as buy-to-let investments.

Of the 235,000 homes bought within the three-month period encompassing July to September, nearly 60,000 were bought by private landlords or those seeking a second residence. These are figures that have completely surpassed everyone’s predictions.

Here at UK Property Finance, we too have experienced a much higher-than-normal percentage of calls relating to buy-to-let financing options, with more and more people thinking about buying new properties with a view to renting them out in order to provide a steady source of income.

What makes the buy-to-let market so attractive?

Although the government has taken steps to make life more expensive for prospective buy-to-let landlords, in an effort to encourage more people to buy their own homes, the fact of the matter is that buying a property to rent it out can still be a financially rewarding experience.

Many landlords buy properties with the intention of charging rates of rent that are significantly higher than the associated mortgage repayments as a means of providing a new source of income.

In addition to this, with house prices rising all the time, buy-to-let properties can also be thought of as a long-term investment. As the worth of a property rises, so does the rent, and the increase in equity means that a buy-to-let landlord can usually remortgage a property within a few years in order to finance the purchase of additional buy-to-let real estate.

Of course, there are a number of potential downsides associated with becoming a landlord, but these should in no way discourage anyone from considering the available options.

As leading property financiers, UK Property Finance is able to source and arrange a wide array of short- and long-term borrowing options that are ideal for new and experienced landlords, whether they are first-time landlords, limited companies, or seasoned property experts.

Our buy-to-let products are highly competitive with affordable repayment options, and we also offer free and impartial expert advice to anyone thinking about any type of property investment whatsoever.