30 Jun The Good News and the Not so Bad News
Peter Gordon of A.J.Buckley reports –
Not so bad news
Nationwide Building Society statistics show stability in the housing market. It’s not growth and, to be fair, house prices have fallen 1.1% below the level prevailing in June last year.
On a shorter scale, the three month on three month measure of house prices was slightly weaker at 0.3% compared with 0.6% recorded in May.
“The property market has moved sideways over the past six months and June’s data suggest that the trend is being maintained through the summer months”.
“Housing market demand has remained subdues of late as evidenced by the weak level of mortgage applications in recent months and the sluggish pace of new buyer enquiries reported by surveyors”.
Perhaps people are reluctant to move with the uncertainty of future mortgage interest rate charges or perhaps their employment status in the forthcoming years.
The good news
Today we have seen the first major lender to reduce their 5 year fixed interest rate mortgage to below 4% at 3.89%. To be fair it only applies to mortgage up to 70% and there is a product fee of £999 although applicants can add this to the mortgage advance. It was only two months ago that five year fixed rates were demanding closer to 5% per annum and I can only attribute this to a reduction in SWAP rates and the lack of demand with some lenders cutting their margins rather than not lending sufficiently. This must be good news for those buyers deliberating over the uncertainty of where UK interest rates will be over the next five years.
There are also underwriters still prepared to offer redundancy only cover. Unless under notice of redundancy, applicants can build the cost of this protection by attaining more competitive interest rates rather than assume their existing lender is best.
I think that you’ll agree that the good news far outweighs the not so good news this month.
For further details, please contact Barton Wyatt Estate Agents Surrey.