The average price of a house in the UK now stands at £230,700, some 30% above the market peak seen in 2007, the house price index has revealed. 

On a yearly basis house price growth was up 5.4% year-on-year in June, more than double the 2.2% year-on-year price growth seen 12 months ago.

The data shows that prices are being propped up, in part at least, by a chronic undersupply of properties coming to market.

There has been a 25% fall in the volume of homes for sale in the first half of the year when compared to the same period last year. Supply has failed to keep pace with demand since January 2021.

Transaction volumes however remain strong – up 22% on the average levels seen in 2020.

That said, buyer demand dipped 9% in the first half of July after the initial stamp duty holiday ended, but overall remains elevated – up 80% compared to the average for this time of year in the more ‘normal’ market conditions in 2017-19.

Price growth is expected to edge upwards to 6% in the coming months before easing back towards the end of the year as the impact of the extended stamp duty holiday unwinds and the economic landscape becomes more challenging.

A number of factors will continue the elevated demand for houses through to the end of Q4, including ongoing buyer preference for more space.

Best advice is to get it reviewed to ensure you are on the best deal.

The low rates on offer will NOT last forever – act now and save.

A former Bank of England Monetary Policy Committee member has predicted that interest rates could rise significantly in the next few years.

Inflation has now caught up with wage growth causing a sharp consumer slowdown and the weak pound has also squeezed consumers and the expectation is that households will adjust their spending downwards.

More and more expats are looking for ways to reduce their monthly outgoings. One of the biggest expenses most people have every month is their mortgage payment.  Keeping this in mind it would be a wise move to review your current mortgage to ensure you are on the best deal possible.

This will not be the case for everybody, your current deal may well be particularly good, but it is most certainly worth checking before the end of the year.

It is highly recommended to seek professional independent advice as to what new deal could suit your current situation.

Reasons to consider a re-mortgage.

• To save money.
• Raise extra cash for a project you have planned.
• Your current deal is ending soon
• Transfer to a fixed medium/long term deal

Help required?

If you would like to review your current mortgage deal please do make contact and one of our independent advisers will be happy to assist.

The current stamp duty holiday on properties valued up to £500,000 comes to an end on 30^th June but did you know that you can still enjoy a stamp duty holiday on properties valued up to £250,000 when your purchase completes by 30^th September.  The additional SDLT for second homes and expats remains in place, but there are still 3 months left to take advantage of the buoyant UK housing market and make your purchase with considerable saving.  If you have been considering a new purchase in the UK with an expat mortgage, please get in touch so we can provide you with indicative quotes tailored to your needs.

 

Mortgages with five-year fixed rates have undergone a surge in popularity within the expat community, nearly half of the completed deals recently have been for 5 years or more.

Data revealed 49% of expats are now choosing an initial fixed rate period of five years compared to only 25% back in 2015.

Meanwhile, mortgages with rates fixed for two years have experienced a plunge in popularity with 36% of customers choosing the shorter-term fixes compared to more than half in 2015.

Brokers think the fact the Bank of England base rate is currently low, coupled with fears over future rate rises, is main driver behind the soaring popularity of five-year deals, which allow customers to lock into a specified rate for a longer term.

Potential pitfalls of five-year deals

While they provide a certain amount of security, five-year fixes aren’t necessarily for everyone. Indeed, several of those questioned in the survey of 200 mortgage intermediaries raised concerns.

They stressed that products with a longer term initial fixed period might only be suitable for customers who expected to stay in their current home for an extended period. This was because anyone considering a house move might have to pay early redemption penalties which could outweigh the benefits of a longer-term deal.

Low interest rates, economic uncertainty around Brexit, a reduction in home-mover transactions and more re-mortgaging means that five-year products have become a viable option for a much larger proportion of customers.

Outlook

Going forward, the brokers questioned, did not see any reason for five-year fixed rates to fall out of favour.

However, many said a stable economic climate post Brexit, which could lead to an interest rate rise, was the most likely cause of any reduction in the attractiveness of the five-year fix.

In need of some guidance?

Can we be of assistance with your new mortgage/re-mortgage we have fully qualified independent advisers waiting to help you.

February 2021 gross mortgage lending to expats has increased by 6.8% from the month before, this is the fourth month on the run. In addition to the month-on-month increases lending this year has increased 18.2% overall.

Experts believe these strong figures are down to Brexit. There is definitely less confidence in the property values of other European countries. Property continues to gain value in the UK at a steady rate and looks like continuing for the foreseeable future unlike the rest of Europe.

Covid-19 has had an effect on the market, but the majority of experts believe this will be very short lived.

One other factor that has contributed to this robust growth is the number of re-mortgages completed. Both expats and UK residents are living in the fear that interest rates are about to jump. These fears are justified as already a good many long-term fixed rate deals have been withdrawn from the market but there are still some extremely attractive deals on offer.

UK property offers really good long-term stability.

The UK property market without doubt still offers value for money if you own a property or can afford to buy one. Anybody who has owned a property in a good area of the UK over the last 10 years would have seen their investment grow substantially.

It is expected that house price increases will level out as the year goes on with a steady and reliable growth rate, again spelling good news all round.

To sum up – traditionally the UK property market has always offered excellent value long term investment potential and there is no reason to believe this will not continue.

Mortgage advice?

If you need assistance with a new or re-mortgage, then please contact our expert independent advisers who are waiting to help.