All posts by Holley Samuel

Lowest Ever Mortgage Rates

The average interest rate for two-year and five-year fixed rate mortgages has dropped to the lowest levels since records began in 2007 according to the latest figures from Moneyfacts. That makes it a great time to remortgage.

We are currently averaging lower rates than last month’s record low rate following two emergency cuts made to the basic rate in response to COVID-19 – this is the interest rate that the bank sets for lending to other banks. The fall in the official cost of borrowing impacts swap rates upon which fixed-rates mortgages are based – and lenders have passed on the reduction in borrowing costs to their customers.

However, some banks and building societies have reviewed the level of risk they take in lending – this is due to the impact that COVID-19 is having on the UK economy.

With these record-breaking fixed rate deals, now is a great time to remortgage, especially if your deal is coming to the end. In addition, if you’re still sitting on your lenders’ SVR, you could save thousands per year by switching to an average two-year fixed rate deal. The gap between the cost of a two-year and a five-year fixed-rate deal has also narrowed so you could pay a lower premium for the peace of mind knowing what your mortgage repayment will be for the next five years.

However, the number of mortgage products to choose from has more than halved – from over 5,200 products to 2,500.

There are currently less products available to borrowers with a low amount of equity or small deposit – those with 5% can choose from 22 products compared to 279 previously available and the choice for those with a 10% has dropped from 563 to 50. That’s why it’s essential to talk to a mortgage broker to find the right deal.

Although lenders have increased rates on loans for people borrowing 95% of their home’s value, this is only a small rise of 0.04% for a five-year fixed rate and 0.1% for a two-year fixed rate and they are still open for business for this sector of the market.

Because lenders have cut rates for people borrowing 90% of their property’s value this shows that competition is still strong in this area even though there are fewer products available.

At The Mortgage Hub we can scour the whole market on your behalf and help you find the best deal and find out if your application will be accepted. Talk to us for advice – we are currently closed but still working remotely until it is safe to open.

 

Property Market in England Opens Back Up

The property market here in Scotland is set to stay on hold for another few weeks, despite restrictions being lifted in England.

How will the ease of restrictions in England affect the property market and could we learn lessons here in Scotland about how to proceed when we are able?

In England, employees who cannot work from home are being encouraged to return to workplaces albeit they need avoid public transport if possible. They are also allowed to spend more time outside (as are we here in Scotland) but are able to travel further afield from their homes in their cars. In addition, estate agents have been permitted to open up for business.

The immediate result was that on Wednesday morning between 7am and 8am Rightmove reported a 45% rise in online property viewings compared to the previous day. In addition, over 2,000 properties were listed for sale on the property portal.

At present, it remains unclear when viewings and new instructions will be able to start again in Scotland but there have been some potential benefits of the lock down to the property market over the last few months.

People have been allowed to spend time walking or cycling locally which has given them a feel for the area and to see streets and pockets that they may not be familiar with. Now that people can go out further afield in England, they have further opportunity to scope out areas of interest more easily. In addition, they can check out the outside of properties that they could previously only view online.

Under current government guidelines, people have been asked to delay property transactions until after social distancing measures have been lifted. However, if the property is empty there is no reason that you can’t continue with the purchase. Many buyers and sellers are renegotiating on timescales with the sale still set to go ahead.

Virtual viewings

With many estate agents working from home and continuing to value properties and market existing homes, many have turned to virtual viewings to enable people to see homes during the lock down. Although they cannot visit homes to take photographs, conduct appraisals for new listings or show prospective buyers around a property they have been able to use the Internet to still promote property that are either currently online or coming soon.

Some agents use 3D cameras that allow browsers to take a self-guided tour of a property and others have used videos taken by the vendors – and with many people using high quality mobile phones with video capability, this has been made even more possible.

The ‘new normal’

Even when things ‘return to normal’, the property market and the way that agents conduct viewings could look quite different.

Buyers are likely to be more heavily vetted to minimise speculative viewings with only serious buyers permitted to enter homes. They will have to adhere to stringent hygiene guidelines and will be unable to open doors and cupboards as part of the viewing process to minimise touching surfaces. When they do view a house, they will have to remain 2m away from the estate agent at all times and children won’t be permitted to accompany parents on viewings. Owners will need to vacate the property and buyers will be encouraged to avoid second and third viewings before making an offer.

Stamp Duty (LBTT)

Although there is evidence that there has been pent up demand from buyers, The Royal Institution of Chartered Surveyors and The The National Association of Estate Agents have called for a stamp duty to kick start the market. This would boost confidence and encourage housing growth for the remainder of this year.

We will be closely watching how the property and mortgage markets perform in England. Contact us if you would like help with your mortgage needs – we are still working remotely.

Buying and Selling Property During COVID-19

Everyone in the property industry is working hard to keep things moving during the coronavirus pandemic.

Even though we are social distancing, working from home and home-schooling our children, it doesn’t mean you can’t look for a new property. With many properties still for sale since the lockdown lots of estate agents are still working remotely in order to give you advice, property information and even hold virtual viewings and appraisals.

According to the latest figures from Zoopla, property sales have continued since the lockdown began and although, as you would expect, the number of available properties is lower, many people have kept their home on the market. In fact, figures show that the number of homes currently for sale is only 1% lower than on March 7th.

This stock is essential in order for the market to bounce back.

People are still searching

There were 70% fewer property sales since the start of coronavirus restrictions but there was an increase in the number of people browsing online for property in the second week. People are using this time to socialise online, look towards the future and being at home, many have started to see their surroundings in a new light. According to Zoopla, browsing levels have increased by 16% week on week.

The market will be affected by first time buyers keen on having their own space after lockdown, families looking for more outside space as the restrictions have made them realise the importance of a garden and we may even see some couples either make the decision to move in together or part – as the lockdown will have made people reassess their personal relationships.

Don’t withdraw your home from the market

With the number of people in lockdown and relying heavily on Internet browsing for things to do, this could be a good time to have your home on the market. If you’re already on the market – there’s no reason to withdraw it. The government hasn’t stopped property transactions from proceeding and empty property purchases can progress as normal. What’s more, mortgage brokers, lenders, solicitors and estate agents are all still working, albeit remotely. If your home is already listed with an estate agency, they can continue to market your property even though buyers won’t be able to view it in person until the current social distancing measures are lifted.

If you receive an offer on your property, there is nothing to stop you negotiating and accepting it, but you will need to be aware that the process will take longer than usual. There will be delays with the process including surveys, exchanging contracts and getting a mortgage approval.

New listings

Estate agents are still working remotely even though the branches are temporarily closed. Although they cannot come to your home for photographs and measurements, they can still provide valuations and help prep your home for sale for when the restrictions are lifted. It’s a good idea to get ahead of the game and get in touch now before they do open up again and their diaries are full. They can also talk to potential buyers about your property before it is on the market and arrange viewings for when the lockdown is over.

Searching for a home

If you are looking to buy a property you can still do things during the lockdown to get ahead. Browse homes online and take virtual tours if possible. Talk to your local agents and tell them what you are looking for – they may know of properties that will be listed for sale once the lockdown is lifted.

Talk to a mortgage broker to find out what you can borrow and the products that are currently available.

If you do find a property you can put in an offer for it, although as mentioned above, the conveyancing process is likely to be slower than usual.

Get your home market-ready

Spend this time getting your property prepped for a sale. Declutter, make repairs, tidy up the garden (gardeners are still working) and consider whether there’s any furniture you could remove from rooms and store in the loft or garage to help make the space look bigger or more appealing.

We are still helping customers to find the right mortgage during this time here at The Mortgage Hub. Talk to us today – we are here to help.

Furlough Explained

Before March this year, many people hadn’t ever head of the furlough scheme. With the onset of the coronavirus pandemic it has become something that we are all now familiar with. Whether you have been furloughed by your employer or want to know more about it, here’s our brief guide.

If your company cannot give you work due to the coronavirus outbreak, you are likely to have been furloughed and your employer would have written to you explaining the situation. If you were made redundant after February 28th, your employer can choose to rehire you under the scheme.

Over the next few months, millions will rely on the furlough scheme although it doesn’t apply to employees who had already signed a contract or switched jobs after the cut-off date 28th February.

What is furlough?

Furlough supports businesses that have been hit by the effects of the Coronovirus (COVID-19) crisis. These include companies within industries that have come to a standstill including pubs, restaurants, cafes, travel firms, hotels, airlines, estate agents, retailers, several service providers and more. Only essential businesses are currently still open. A recent poll by YouGov suggested that 14% of workers had already lost their job due to Coronovirus.  The treasury expected 10% of private firms to use the scheme but 44% of those polled have indicated that they will place at least half of their staff on furlough.

Furlough provides temporary help to pay 80% of the average annual wage of those who cannot do their jobs. The aim is to help companies retain employees and keep them on the payroll rather than make them redundant, even if they aren’t working.

How much will you receive?

The amount that companies can claim back from the government is 80% of an employees salary, up to £2,500 per month before tax per employee. The company can choose to top this up to the full monthly amount. You are required to have been on the payroll of the company since at least 28 February 2020 and can be full time, part time, or on a flexible, zero-hour or agency contract. The minimum amount of time you can be furloughed for is three weeks. The scheme operates for three months from March 1st although most people won’t receive furlough until the end of April in the first instance.

If your wages vary each month, your salary will be based on either your average monthly wage from the previous tax year or the same salary as the previous year for that particular month – whichever is higher.

Does it include bonuses?

You will receive up to 80% of your core salary and it doesn’t include any bonus or commission payments you were due to receive. It will also cover the minimum automatic enrolment pension contributions made by your employer, along with their National Insurance contributions.

Employment rights

If you are on furlough you will have the same employment rights. If you become unwell, you will be placed on statutory sick pay and placed on furlough when you recover. If you are shielding, you are also eligible.

Restrictions

If you have been furloughed, you cannot do any work for your employer. If you have more than one employer, you can receive furlough from any of them up to £2,500. You can also continue working for any employer that still requires your services and you can still volunteer for your company as long as you aren’t creating revenue or providing a service.

You can’t do any work for your employer if you have been furloughed.

When furlough ends

When furlough ends your company is under no obligation to keep on employees, but the government has indicated that the scheme will be extended beyond the end of May if required. However, the hope is that when furlough ends, restrictions will have been lifted and businesses can operate as normal enabling companies to pay their employees as before.

We are still here and on-hand to help you to navigate this difficult time. Whether you want to find out more about taking a mortgage break, proceeding with a mortgage offer or remortgaging, talk to our team today.

Government Advice for Movers

This week the Government issued advice to those thinking of moving or in the middle of a transaction, and it has urged buyers and sellers to adapt and be flexible.

It has been advised that if you are in the middle of a house move and a sale has been agreed, to continue with the sale – there’s no need to pull out. However it’s important that you follow guidance to stay at home to keep yourself and your loved ones safe.

The new advice on house moves from the Government moves states: “Given the situation in the UK with regard to the outbreak of coronavirus (COVID-19), we urge parties involved in home moving to adapt and be flexible to alter their usual processes.

“There is no need to pull out of transactions, but we all need to ensure we are following guidance to stay at home and away from others at all times, including the specific measures for those who are presenting symptoms, self-isolating or shielding. Prioritising the health of individuals and the public must be the priority.

“Where the property being moved into is vacant, then you can continue with this transaction although you should follow the guidance on home removals.

“Where the property is currently occupied, we encourage all parties to do all they can to amicably agree alternative dates to move, for a time when it is likely that stay-at-home measures against coronavirus (COVID-19) will no longer be in place.”

Therefore, it’s important that where possible you delay moving to a new property while the country fights Coronovirus. If you have already exchanged missives and the property is currently occupied then it’s important to agree a delay in order to resolve the situation or at least give yourselves enough time to have the property cleaned prior to moving in.

If moving is unavoidable and parties are unable to reach an agreement that allows flexibility then you must follow advice on staying away from others to minimise the spread of the virus.

Mortgage lenders are currently working to find ways to enable customers who’ve exchanged contracts to extend their mortgage offer for up to three months to enable them to move at a later date.

Given that there should be no visitors to your home at present, it’s important that you do not have viewings on your property – this is not to say that your agent can’t to conduct virtual viewings so speak to them about this as an alternative.

You can still accept an offer on your property but factor in that the process will take longer and you may find that the buyer changes their mind further down the line given the volatility of the situation across the UK. However, if the property you’re buying is unoccupied you can continue with the transaction.

Talk to us if you would like further advice on buying and selling property at this time.

Several Lenders Retain Their Mortgage Offering

Following the news that several lenders, including Halifax and Barclays, are withdrawing mortgage products with a high Loan to Value (LTV), Mortgage Solutions has revealed that other lenders have no plans to follow suit.

In the last few days, Barclays announced that it will only accept applications on 60% LTV mortgage products and Halifax revealed that they had made the same decision.

Other lenders are holding firm at present and have revealed that they have no plans to do the same although they have indicated that this will be under constant review.

Some of the largest lenders including Nationwide and Santander are still offering 95% LTV mortgage products as of March 26th. Nationwide has also stated that it will continue to support the market within the very unusual constraints in this present situation as a result of COVID-19. It does not have any immediate plans to withdraw mortgage products but admitted that applications could take longer to process. Similarly, Santander is monitoring the situation to see how this crisis is affecting the mortgage market.

At present all of the major lenders are offering mortgage holidays for anyone who’s income has been affected by COVID-19 as a way to support existing customers and if this is pre-agreed, it should not have any adverse effect on your credit file.

If you feel that you need a mortgage repayment holiday, make sure you agree this with your lender first or talk to us for advice. We are still working hard to provide the same level of service, albeit remotely, so please don’t hesitate to contact us.

 

Mortgage Payment Holidays

Mortgage lenders over the last couple of days have set out how they will provide payment holidays for up to three months for those who are financially affected by Coronovirus (COVID-19).

Mortgage payments are often the largest outgoing for homeowners and lenders want to reassure them that they are working towards measures to support them during this very difficult and uncertain time – especially as we don’t know how long this may go on for.

If you are concerned about your current financial situation, we can help. We can talk to you about any implications a mortgage payment break could have, liaise with your lender or inform you of what you need to ask them when you do speak to them.

In the meantime, here’s a brief guide to taking a mortgage break: BLOG

Taking a Mortgage Payment Holiday

A mortgage payment holiday means that your mortgage repayment is deferred for a set period of time during which you won’t make any repayments. Interest will still accrue whilst you are on your mortgage payment holiday.

You may want to take a mortgage payment holiday due to a shortfall of income that you believe is a temporary situation. This isn’t a permanent solution because you will need to carry on making your full mortgage repayments once this period is over – usually three months. The shortfall will be made up in the future, which could be over the remaining term.

How does it work?

While you take a mortgage holiday, the capital sum of the loan remains the same while the interest accrues. At the end of the payment holiday the rules re-apply and your lender will assess your circumstances and come to an arrangement regarding repayment of the arrears. Any arrangements will minimise the risk of repossession.

Will there be a blanket repayment holiday?

At this point in time lenders are helping people on an individual basis so an automatic payment holiday for all customers isn’t necessary as not all customers will be unable to meet their repayments.

Will it affect my credit score?

Lenders have stated that because of the very unique circumstances we are facing due to COVID-19, they will be talking to credit references agencies to ensure that it will not impact their credit score. However, we advise that you check with your lender before making the decision to take a mortgage break. Each lender has a different approach for reporting to credit reference agencies, but they have made assurances that a repayment holiday won’t result in an adverse impact on your score.

How do I apply?

Lenders are offering customers who are up-to-date with their mortgage payments and impacted by COVID-19 the ability to self-certify. Usually, a lender will assess your individual finances and consider what options are suitable. However, with the sheer volume of people asking for help they have waived this for a more straightforward process.

If you believe that you have been impacted by COVID-19, talk to your lender at your earliest convenience to find out if this is a suitable option. At The Mortgage Hub we can help you so get in touch if you would like advice on applying to your lender.

Am I eligible?

If you have been in arrears with your mortgage repayments and aren’t up to date, the Financial Conduct Authority (FCA) rules state that lenders must ensure that any forbearance offered enables recovery through full repayment of arrears, minimises the long-term impact of arrears, and that the mortgage remains affordable and sustainable in order to ensure that your home won’t be repossessed in the future. That’s why payment holidays are a short-term solution and will not be offered if you aren’t currently up-to-date.

Renting

We advise that you contact your landlord or managing agent if you are worried about meeting your rental payment. Your landlord may be able to talk to their mortgage lender to discuss the options which could allow you to take a break in payments.

Get in touch if you’d like any advice. We’re here to help.

Coronovirus (COVID-19) and Insurance

We deal with many insurers here at The Mortgage Hub and would like to share the following general guidance on their policies in light of the current COVID-19 outbreak.

There is no exclusion on many Life Cover policies that apply to COVID-19 or other infections disease, which result in the death of the plan holder. Should you pass away as a result of COVID-19 or complications from the virus, you will receive the lump sum as set out in your plan.

If you have Serious Illness Cover (SIC) it may not be covered by Coronovirus. If the virus causes a long-term debilitating illness or condition covered by your policy, you would be eligible to claim.

With regards to Income Protection, you will be able to make a claim if you’re unable to work due to COVID-19 after the expiry of the deferred period as set out in your plan. This could include situations where quarantine is imposed by a GP and you are unable to carry out your work duties in your home environment.

Every plan and policy will differ so it’s essential that you get the correct advice. Talk to us at The Mortgage Hub and we will give you clear information and facts and look into your policy so that you know what you could be currently entitled to.

Arranging Insurance

We can arrange appropriate cover that suit your individual circumstances if required. Whether you are in an ‘at risk’ category i.e. you have an underlying health condition or are currently pregnant, we strongly advise that you get advice on the options available to you. Or perhaps COVID-19 has raised your awareness of protecting your income. We offer telephone appointments if you are currently in isolation and can talk you through the options.

Our Policy During the COVID-19 Outbreak

At The Mortgage Hub we have been working on a contingency plan to assure our clients still receive the excellent service standards that we have always achieved.

We have full remote access to all our systems should any or all of us be required to self-isolate. We want to reassure our clients that it will be business as usual during this current (COVID-19) Coronavirus outbreak and we are working hard to make sure that happens.

During this period, we are available to conduct appointments via a phone call and or over email.  This will ensure that clients can still conduct any arrangements speedily and with ease.

For visitors to our branch, the health and wellbeing of our clients and employees is of utmost importance and we are following official guidance from the UK Government. For example, our branch will be an environment where we will not shake hands with clients, staff are educated on prevention and we have elevated our already high standards of hygiene.

We believe that even during these challenging times people in Scotland will continue with buying and selling property to take advantage of the recent rate changes, and we are on hand to ensure our clients get the best mortgage deal possible.

We will monitor the situation closely and navigate this period with the health and wellbeing of everyone in mind.

If you would like to make a telephone appointment, please don’t hesitate to contact our team who will be more than happy to help.

Thank you for your support.

Interest Rate Cut – Should You Remortgage Now?

With the interest rate cut announced earlier this week, should you remortgage now?

Following the interest rate cut, you may wonder how it will affect your mortgage rates and if you should remortgage.

The Bank of England cut interest rates this week in a bid to support the economy during the Coronovirus outbreak. Rates were reduced from 0.75% to 0.25% taking borrowing costs down to the lowest level in history.

What is remortgaging?

Remortgaging is when you take out a new mortgage on a property you currently own. This would be to replace your existing mortgage or to release money from your equity. At present, around 30% of home loans in the UK are remortgages.

Your mortgage is a huge financial commitment and by having the cheapest mortgage deal available to you can save £1000s each year.

Why remortgage?

There are several reasons you may consider remortgaging:

  1. Your current deal is about to end. Your mortgage deal is likely to be fixed for two or five years, after which you will be put onto the lender’s standard variable rate which is likely to be higher. Start looking for a new mortgage around three months before your current deal is about to end.
  2. You want a better rate. If you’re tied to an initial deal, you may have to pay a large early repayment charge which can be as much as 5% of your outstanding loan and you may have an admin fee to pay on top. However, the savings could outweigh this so get the correct advice.
  3. Your home’s value has gone up. You may find that if you have more equity you qualify for a lower loan to value band, and eligible for a better rate.
  4. You are concerned about interest rates rising. If you’re on a variable rate you may want to fix it for peace of mind.
  5. You want to overpay. Your current mortgage may not allow you to make overpayments.
  6. You want to borrow funds. If you want to release equity, make sure this is the most efficient form of borrowing. We can help you to work out if this is the most affordable and cost-effective option.

What will happen to mortgage rates now?

As a result of this cut in interest rates, some mortgages will get cheaper – for example if you are on a tracker mortgage, your repayments will be lower. These people will save around £25 per month per £100,000 or mortgage whereas those on a fixed rate won’t notice any change.

It will take a few weeks to filter through, and we will see the rates of new mortgage fixes drop making a good time to remortgage.

Lender response 

Several lenders have already said that they will offer their customers a 3 month mortgage holiday for those affected by the Cornovirus and people could try to create a small cash-buffer by seeing if they can save money by switching their mortgage.

The extent of the impact of Coronavirus on the housing market is yet unknown, although the Bank of England governor suggested that the UK economy could shrink in the coming months.

For savers, the news isn’t so welcome as saving rates have been low for a long time and this cut could lead to further reductions in rates.

Talk to us if you want to find out if this new rate could save you money. We offer phone appointments at a time to suit you.