House price growth reached its highest level for 18 months at 2.3% for the year to February, the latest index from Nationwide Building Society shows.

Average UK house prices also climbed by 0.3% month on month to reach £216, 092.

Nationwide chief economist Robert Gardner says: “While overall economic growth ground to a halt in the final three months of 2019, labour market conditions remained buoyant and borrowing costs low.

“The decisive election outcome may have provided a boost to buyer sentiment.

“Recent data releases indicate that the housing market has gathered momentum in recent months and the latest house price figures are in line with that trend. “The number of residential property transactions and mortgages approved for house purchase increased around the turn of the year and surveyors have reported an increase in new buyer enquiries.”

Looking ahead, economic developments will remain the key driver of housing market trends and house prices Gardner believes. He adds: “Business surveys suggest that activity recovered in the New Year, but there are still significant uncertainties that threaten to exert a drag on the economy in the coming quarters.”

“The global economic backdrop remains challenging, with the coronavirus outbreak expected to weigh on global activity in the coming quarters. Investment is likely to remain subdued until the UK’s future global trading relationships become clearer, which is unlikely until early next year.

“Overall, we expect the UK economy to continue to expand at a modest pace in 2020, with house prices remaining broadly flat in 2020 as a whole.”

The property market is feeling significantly more upbeat now that Brexit uncertainty has been lifted. We’re by no means out of the woods yet, as trade negotiations with the EU could easily turn sour and hit sentiment.

Overseas buyers and expats are sizing up the UK property market for potential bargains, taking advantage of the weak pound and falling property prices, according to the latest figures released

The property portal found that searches for UK property by overseas buyers have grown steadily over the last 12 months. They now account for 6.6% of all activity on the portal in the first three months of this year, compared to just 3.6% three years ago.

It said some investors are keen to capitalise on softening prices and a weak pound and are looking for discounts.

More expats choosing broker assistance for mortgages

The number of expat mortgages coming through brokers has risen steeply over the last 2 years, this figure now stands at 71% from 64% last year.

There has been a steady increase in mortgages sold by intermediaries to expat buyers and re-mortgagers as the market remains very buoyant indeed.

Independent broker benefits

• Full range of mortgage choices
• Industry qualified advisers
• UK based for easy communication
• Fully automated service
• Faster completion

Assistance required

If you would like help with your new or re-mortgage, please make contact and one of our advisers will be happy to help.

The Bank of England has refused to rule out cutting interest rates to below zero to boost the economy, but the move would penalise savers while rewarding homeowners.

The Bank’s governor, Andrew Bailey, has confirmed that negative interest rates are under “active review” after being questioned by MPs on Wednesday. Speaking at a hearing with the Treasury Select committee he told MPs that the Bank was looking at how effectively other central banks have used negative interest rates. He said “We do not rule things out as a matter of principle. That would be a foolish thing to do. But can I then follow that up by saying that doesn’t mean that we rule things in.”

Policymakers are considering negative interest rates after official figures showed that inflation had fallen to a four-year low of 0.8% in April – well below the Bank’s 2% target. The Bank has already cut the base rate to a record low of 0.1% to help support the economy amid concerns about the coronavirus pandemic. Lower interest rates can be used to help boost the economy as they make it cheaper for households and businesses to borrow money.

Japan’s central bank and the European Central Bank have both already adopted negative interest rates.

How do negative interest rates work?

If a country’s central bank sets its base rate below zero, high street banks must pay to deposit cash with it.

It is an extreme measure designed to encourage banks to lend more money to businesses and consumers in order to stimulate the economy.

For example, if the interest rate goes below zero it will encourage high street banks to offer cheaper loan rates to the public.

How could negative interest rates affect savings?

For savers negative interest rates are huge problem as they will see their cash eroded. This is because they are will be charged by banks to look after their cash. If the bank cuts the base rate below 0% this means further woe for savers who have already seen rates plummet this year.

The situation for savers is desperate and things just continue to get worse. If anyone does offer negative savings rates it would be the big banks, but I do not see it happening. Savers faced with having to pay to keep their money with a provider will find other things to do with it.

Definitely yes! One big difference between the challenges of 2020 and the economic turbulence of 2008’s credit crunch is that there is no issue with the liquidity for banks and building societies.

Expats should review their UK mortgage and potentially save thousands

Make no bones about it, 2020 is the year of the expat re-mortgage. You only need look at the rates being offered by lenders – particularly in the lower LTV bands. These rates are not going to stay this low for much longer so if you have a expat current variable rate mortgage review it sooner rather than later.

Research suggests that over half of all expat borrowers who move to their lender’s standard variable rate after the current deal finishes don’t re-mortgage or product transfer for 10 years, while a quarter of re-mortgagors were said to find the whole re-mortgage process difficult, with 42% saying they didn’t have time to shop around.

The ‘shopping around’ mentality is clearly far more embedded in the UK consumer than ever before, however this doesn’t always translate to mortgage borrowers, even when the savings can be far more than changing utility company or broadband provider.

Expats need to get the message that re-mortgaging is where substantial savings can be made – especially with rates as they are now. Rates are unlikely to remain this low for much longer so acting now could save thousand in the future.

A re-mortgage is not always suitable for everybody as your existing deal may well have penalties attached to change within the discounted period. It is always recommended to seek independent professional help as to what is best advice to suit your needs.

Like to talk over your mortgage needs?

If you are looking to secure a new or re-mortgage please do make contact and one of our independent advisers will be happy to assist.

Expats should take heart

The direct and indirect impact of COVID-19 has affected the performance of different sectors and financial markets in different ways. The world’s major indices have suffered considerable losses – recently, it was reported that The Dow Jones Industrial Average crashed by almost 32%.

Other financial assets have so far proven resilient, such as UK real estate

The ‘Boris bounce’

House prices are typically used as an indicator of capital growth for real estate. In 2019, the political deadlock over Brexit resulted in significant market uncertainty and modest house price growth. Some commentators feared house prices would drop significantly as a consequence of Brexit – however unlikely such events actually were.

Boris Johnson’s victory in the 2020 General Election and his subsequent ability to pass the EU Withdrawal Bill through parliament resulted in surging investor interest in residential real estate. House Price Indexes for March 2020 provided evidence to this affect.

Both Halifax and Nationwide recorded that average residential property prices that month were 3% higher than they were the year prior.

With Brexit uncertainty forgotten, sellers were again eager to place their properties on the market. Coupled with the government’s growing excitement about ushering their new ‘housebuilding revolution’, it seemed that the UK was finally ready to confront the ongoing housing crisis and match the growing demand for housing with the adequate level of supply; generating strong increases market activity and a return of strong value returns all-round.

COVID-19 has put a pause on transactions

Lockdown measures imposed by the government in a bid to contain the COVID-19 outbreak has had a significant impact on the real estate market.

For the moment, the government is actively discouraging people from buying and selling properties, and some lenders have reacted to this news by deciding not to take on new enquiries.

However, I believe the momentum around the post ‘Boris Bounce’-market has not disappeared. In fact, in lieu of transactions being available, pent-up demand is likely to further exacerbate market activity once the pandemic is over.

Ultimately, it can be said that COVID-19 has, in a sense, taken the place of Brexit uncertainty in artificially supressing market activity and, thus, property price growth.

This means that once the virus is contained there is no reason to suggest why the property market will not make a quick recovery.