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Saver Beware – Mortgage rates threaten your savings in 2018

People and families are warned that the real threat to their savings isn’t stock market volatility this week. The volatility of the stock market this month is creating serious concerns among people, with global indexes tumbling. Corrections on the likes of Dow Jones has seen them fall by over 1,000 points, with European indexes following suit.

Uncertainty on the market shouldn’t concern the average saver, however, but rising interest rates will cause problems. According to The Telegraph, personal wealth and savings are threatened by Interest hitting rates. This rise is especially true when it comes to the mortgage market which rises alongside interest.

Mortgage rises – A threat to personal Savings

The Bank of England’s recent diagnosis of the British economy has opened it up to calls for interest rate increases. While the rate remains static for now, 2018 is sure to see numerous additions to the 0.5% rate. Since September 2017, the level of borrowing for mortgages rose by over 14%, totalling £69.6bn by December.

For many families, multiples increases to interest rate threaten the finances of millions due to increased borrowing. When interest rates rise, any borrowing incurred by an individual/family, repayments increase in line with interest. According to The Independent, households are already seated in financial gloom this January, and likely to continue.

According to the IHS Markitt’s Household Finance Index, Households hit a record low in their financial wellbeing. And with proposals for a plural approach to interest rate increases, this well-being is set to get worse.

Source: Gooruf

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House price imperfect storm?

NEWS that house prices dipped in January shouldn’t come as a surprise, with new buyer enquiries falling for the tenth consecutive month, sales dipping and valuations (for potential sales) showing no signs of optimism.

You should be forgiven, however, for being apathetic about house prices or stock markets, if the headlines were anything to go by.

In one week, leading newspapers commented ‘inflation has peaked’ (therefore rates don’t have to rise) followed a week later by ‘interest rates have to rise to protect against rising inflation’.

Another states a ‘shortage of a supply creating a surprisingly robust housing market’ followed the next week by ‘turns downbeat on housing market’. It’s hard to feel you aren’t suffering neck ache on the umpire chair watching tennis as first time buyers reaches the highest level for ten years.

We covered the housing market in detail over the last year, and again three weeks ago, but we might just look at some more contributing factors – upside and downside.

As we said it would, a weakened sterling grabbed the attention of overseas’ investors who bought UK houses at a discount, in fact more than 50 per cent of buyers in the top London areas were foreign purchasers. That, of course, ripples into the wider market as the seller purchases elsewhere in the UK. Any moves to increase interest rates will drive sterling upwards, therefore eradicating (albeit slowly) the discount overseas’ purchasers are currently enjoying.

Moreover, any thoughts of rises in interest rates will have a much larger downward impact on new purchasers’ ability to borrow and repay, and on their confidence in doing so. The Bank of England has stated it will now begin raising rates earlier, which I find simply staggering.

Irrespective of which side of the fence you may be on, inflation has been driven through the roof by the calamity of a poorly run Brexit ‘plan’ (which may or may not happen) and which has nosedived sterling, therefore creating imported inflation (due to the now heightened price of imported goods).

Quite what that has to do with the man on the street (who will be impacted by rate rises) causing real inflation is beyond me. OPEC lowering oil production (which raises oil prices and so inflation) is real, but still not the man on the street.

And so, is Mark Carney bluffing when he read out his script about interest rates?

Let’s consider that in October last year, the CBI announced there was a steep drop in retail sales, which rivaled that of the 2009 recession. This is echoed by consumer spending dropping again as Visa announce a year on year fall in credit card spending in eight of the last nine months.

If the man on the street isn’t causing inflation, why penalise him by taking even more money out of his disposal income by raising rates?

It would be more prudent to await the demise of the flu like impact of Brexit’s uncertainty on sterling (and so inflation) before tampering with rates, especially as mortgage approvals are now at the lowest levels for five years.

Add to this, the horrible concoction for the buy to let market where investors/landlords are finding it increasingly difficult to remortgage because of the new borrowing rules (so rising monthly payments); in 2020 after phasing in, landlords will not be able to offset their mortgage costs against their income; and rising mortgage rates.

A landlord with £80,000 income and an £80,000 mortgage repayment has no tax. Now they are likely to have an £80,000 income with a £100,000 mortgage where the whole £80,000 is liable to tax but with a £100,000 expenditure to take care of – and a tax bill on the £80,000!

It is no surprise that new landlord mortgages are down over 17 per cent year on year and that trend should continue to plummet irrespective of interest rates.

All of this points to interest rates not rising apart from one or two key matters: wage inflation coming through and pushing up spending power and inflation; a hard Brexit plummeting sterling and importing further inflation.

We’ll see. In the meantime if you are a buy-to-let landlord there are a number of new options your mortgage broker will be able to point you to which will assist in the above ‘imperfect storm’.

Source: Irish News

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Plans to build 350 new homes move forward

Two sets of plans that could together bring about the construction of more than 350 new homes in the East Riding are set to move forward following positive decisions at the council’s latest planning committee meeting.

Plans from Persimmon Homes (Yorkshire) and Hull and EY Hospitals NHS Trust cover development off Castle Road in Cottingham. The reserved matters application covers siting, appearance and layout.

The scheme proposes the construction of 180 houses, with a mix of two-, three- and four-bedroom properties.

It also includes the creation of access roads, and the provision of parking, landscaping and public open space.

Outline planning permission for a wider scheme comprising 600 houses, care home, retail, healthcare facilities and sport pitches was granted in November 2013.

The latest plans went before East Riding of Yorkshire Council’s planning committee on 15 February. Councillors at the meeting voted to approve plans, subject to the completion of the Section 106 Agreement.

Also considered at the meeting were plans submitted by Spawforths, on behalf of the applicant, for a site to the west of Howden Parks.

The outline application proses the construction of 175 houses on a 22.1-acre site.

The site was originally proposed for housing in 1996 and formed part of the former Boothferry Borough Local Plan. It was also part of a hybrid application for 630 dwellings that was granted consent in 2014, but has now expired.

Councillors voted to defer a decision until an objection from the Environment Agency is withdrawn. Once this is received, the council’s director of planning and economic regeneration will be authorised to grant approval.

Source: Insider Media

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Property prices increase but sales fall

Property prices continued to edge up in January but the number of sales agreed was down 5.5 per cent from a year ago, according to Rightmove.

Data from the online property portal showed the average price of properties coming to market increased 0.7 per cent, or £2,067, over the past month.

While sales numbers slipped in the final quarter of 2017, the site recorded a 9 per cent year-on-year increase in traffic in January, suggesting demand is starting to pick up.

Overall prices were up 1.1 per cent over the past year to a national average of £297,587.

In the north west they grew by 2.3 per cent in January to an average of £187,134, while the south west saw prices climb 1.6 per cent to an average of £294,046.

But four regions saw prices decline in the month, down 4.4 per cent to an average of £139,156 in Scotland and by 2.7 per cent to an average of £141,155 in the north east.

Rightmove, which saw four million visits to its site each day in January, said demand was robust but buyers were being “very choosy”.

The average number of days it takes to sell a property leapt to 67 in December, from just 54 in May last year.

Miles Shipside, director at Rightmove, said: “Setting tempting asking prices and quickly reducing them if there is little initial interest will be key to turning this promising level of buyer activity into actual sales.”

He said those selling to first-time buyers stood the greatest chances of a successful sale, with demand picking up after the government’s decision to scrap stamp duty for first-time buyers on properties worth up to £300,000.

Craig McKinlay, sales and marketing director at Kensington Mortgages, said it was positive to see house prices rising in line with wage inflation at a far more sustainable rate.

Jeremy Duncombe, director at Legal & General Mortgage Club, said: “We have a lot more to be positive about that in previous years: house prices are rising at a far more sustainable rate and, couple this with the exemption of stamp duty and government schemes, and it is no surprise first-time buyer levels are at an 11-year high.”

Source: FT Adviser

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Home ownership and property development delays

At a time when UK home ownership is under severe pressure it may surprise many to learn that there are 420,000 properties with planning permission which have yet to be built. This is a 16% increase from the previous year and begs the question, if demand is there, why are property developers not building homes?

UK HOME OWNERSHIP

A report by the Institute for Fiscal Studies has found an alarming fall in the number of young middle income adults who owned their home in 2016. Overall it is fallen from two thirds in the 1990s down to just 25% in 2016. We also know that house prices over the last 20 years have increased seven times faster than the average income of the middle 20% of households in the UK (with after-tax income of between £22,200 and £30,600).

In a perfect example of the problems facing the UK housing market we also know that just 25% of those born in the late 80s owned their own home by the age of 27. This compares to 33% for those born five years earlier and 43% for those born in the 1970s. We have seen falls of more than 10% in home ownership in every area/nation of the UK, since the 1990s, with the south-east hit particularly hard, falling from 64% homeownership down to just 32%. The simple fact is that relative incomes are much lower relative to house prices and this situation is unlikely to change in the short to medium term.

WHY ARE THERE SO MANY UNDEVELOPED HOMES?

A report by the Local Government Association has cast a very disturbing light on the property market and especially those homes which have been granted planning permission. As we touched on above, there are now 420,000 properties in the UK which have planning permission but have yet to be built. This is a 16% increase from last year and when you bear in mind the UK is falling short each year to the tune of around 50,000 newbuilds, surely this is a problem which can be addressed fairly quickly?

There is some debate as to why homes with planning permission have yet to be built and while the official statistics show that it takes on average 40 months from planning permission to completion, 8 months longer than 2013/14 this is not the whole picture. We know for a fact that building regulations have tightened over the years, developers may have outline planning permission for certain properties but when it comes to the detail it can prove excruciatingly slow where the local authorities are involved. However, it would seem that ministers have something of a radical proposal in mind!

USE IT OR LOSE IT

There is some debate as to whether the introduction of a “use it or lose it” rule for property development might focus the minds of developers. The idea is that property with planning permission would need to be completed within a predetermined time scale otherwise planning permission would be withdrawn. It is unclear at this moment in time but there may also be some kind of penalty under the proposed regulations when reapplying for planning permission which had lapsed.

Over the years we know that property developers up and down the country have land banked sites as a means of securing their long-term future projects. The idea that they should be forced to build properties on these land banks within a predetermined period of time is controversial. Where will this all end? Would it attack the integrity of the free market? There are many questions to be answered but forcing developers to build properties may curry favour with the public but could decimate the UK investment market.

Source: Property Forum

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The risers and fallers of London boroughs ranked on house price growth as wider UK demand remains robust

Housing demand remains resilient fuelling “cautious optimism” among new sellers in most regions of the UK, according to a new report from Rightmove.

Average asking prices were up by 0.8 per cent (£2,414) this month, with all regions but one recording the price of newly-marketed property rising this month. The south west was “a very marginal exception” with a fall of £131.

The annual rate of increase however, is still subdued at 1.5 per cent, according to Rightmove’s report. It has been buffeted by London’s year-on-year fall of one per cent.

Rightmove compiles London borough data based on a three month rolling average to provide an indicator of overall price trends in each borough over time.

Here’s how house prices have been changing across the capital:

The risers:

Borough Avg. price Feb 2018 Monthly change Annual change
Bexley £408,466 1.3 per cent 4.2 per cent
Hackney £654,695 0.2 per cent 3.6 per cent
Barking and Dagenham £317,065 0.2 per cent Three per cent
Havering £409,814 0.4 per cent 2.8 per cent
Redbridge £453,600 0.1 per cent 1.3 per cent
Haringey £607,736 1.4 per cent 1 per cent
Croydon £440,521 -0.2 per cent 0.8 per cent
Greenwich £446,158 1.1 per cent 0.5 per cent
Hillingdon £493,167 1.6 per cent 0.2 per cent
Hounslow £542,843 -0.8 per cent 0.1 per cent

The fallers

Borough Avg. price Feb 2018 Monthly change Annual change
Lambeth £635,376 -1.4 per cent -7.3 per cent
Camden £978,381 0.1 per cent -5.8 per cent
Merton £621,033 -0.2 per cent -5.7 per cent
Richmond upon Thames £811,377 -0.4 per cent -4.1 per cent
Islington £743,566 0.2 per cent -3.8 per cent
Brent £571,722 -0.6 per cent -3.5 per cent
Harrow £549,413 0.0 per cent -3.3 per cent
Barnet £637,757 0.1 per cent -3.3 per cent
Tower Hamlets £588,847 -1.2 per cent -2.9 per cent
Enfield £446,688 0.4 per cent -2.9 per cent

Miles Shipside, Rightmove director and housing market analyst, said:

Whilst it is the norm for new sellers’ asking prices to be buoyant at the start of a new year, this first complete month in 2018 is seeing more pricing optimism than the comparable period in 2017.

The political and economic uncertainty is out of sellers’ control, but they are in control of their asking prices, and in general they are not being overly ambitious or setting too high an asking price.

Shipside said, nationally, two per cent more sellers had come to market this month compared to the same period a year ago – “a small step in the right direction”.

It comes as chartered surveyor firm e.surv’s new mortgage monitor for February reported a positive start to the year for the UK mortgage market, with an increase in the number of small deposit borrowers being approved.

It found that a fifth of all approvals went to small deposit buyers – well above recent months. In December, 18.2 per cent of loans were to this part of the market while the month before that was 17.2 per cent.

Richard Sexton, director at e.surv, said: “We are now starting to see the effects of the Bank of England’s decision to increase the base rate filtering through to the market.”

Figures out last week said that the number of mortgages taken out by first-time buyers had surged last year, to its highest level since 2006.

Source: City A.M.

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Borrowers rush for fixed-rate mortgages as Bank of England rate hiking cycle continues

British consumers expecting another jump in the Bank of England’s interest rates are rushing to lock in fixed-rate mortgages, new data shows.

The proportion of customers searching for fixed-rate mortgages on data firm Experian’s comparison site arm rose to over 67.4 per cent in February, a jump from only 60.3 per cent in December.

The new hawkish tilt to the Bank of England has been a relatively recent development. Interest in fixed-rate mortgages had jumped in September, when only 58 per cent of potential borrowers searched for steady interest rates, after the Bank gave its first indications it would consider reversing its previous move, a post-Brexit-vote cut in August 2016.

The Bank of England’s determination to start raising the base rate at which it lends to banks has taken many economists by surprise, which resulted in a surge of interest in remortgaging from households faced with the first rate hiking cycle in over a decade.

Demand for fixing the rate, rather than plumping for a variable tariff which could rise if Bank of England lending rates do, jumped to 67.1 per cent in November after the first hike.

Separate data from UK Finance last week showed a spike in remortgaging activity as procrastinators rushed to get a better deal, with 7.4 per cent more remortgagers than the same month a year earlier.

The jump in interest in remortgaging has come against a backdrop of falling demand for mortgages from first-time buyers and home movers.

The Bank this month gave a strong signal that it expects to hike rates again in May, saying market expectations of a first hike only in November would not be sufficient to reduce inflation to target in three years’ time.

A May hike would raise bank rate, the Bank’s main interest rate to 0.75 per cent, its highest since February 2009 as the central bank fought the financial crisis. Economists then expect a second rate rise in November, before a period of stability as the UK prepares to leave the EU in March 2019.

Source: City A.M.

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Estate agents, housebuilders and the outlook for UK house prices

The outlook has not been clear for some time. On the one hand, in many parts of the country, house prices are “too expensive” by just about any traditional measure, and need to fall.

On the other, sellers have mostly refused to lower their prices. And government intervention, whether via low interest rates or high stamp duty, has only added to the atrophy.

The result, for two or three years now, has been stagnation. Neither the bulls nor the bears have won the argument.

Will that change in 2018?

Sing me a sad song for the estate agents

In 1999, before the great era of central bank interest-rate intervention began, the ratio of house prices to earnings stood at 3.7. Today, according to the Office for National Statistics, the house-price-to-earnings ratio stands at 7.6.

This varies considerably by region. Copeland, West Cumbria, is the most affordable part of the country (in terms of local earnings) at 2.8 times the average pay packet. Kensington and Chelsea is where the ratio is at its highest – at 38.5 times.

Of course, this is just one measure of affordability. Earnings do not matter so much if you already own a property. What is more important are financing costs; low interest rates have made mortgage repayments very cheap for a very long time.

And as an indicator of whether to buy or sell, the house-price-to-earnings ratio has not worked for many years. As regular readers know, I like look to other bellwethers – the state of the companies that operate in the sector: the estate agents, the portals and the builders.

We’ll start with the estate agents. (NB: all of these charts are three-year charts. The red and blue lines are the one-year and 55-day moving averages, which will give you an idea of the trend.)

Here’s Countrywide (LSE: CWD), the UK’s largest estate agent.

Estate agents, housebuilders and the outlook for UK house prices Commercial Finance Network

This is not good. At all. What was a 600p stock three years ago is now an 80p stock. New lows were hit just this week. The decline is inexorable.

London-centric Foxtons (LSE: FOXT) is not much better.

Estate agents, housebuilders and the outlook for UK house prices Commercial Finance Network

From 290p in 2015 to lows around 65p. What is more positive about Foxtons is that there appears to be some sort of stabilisation around the 65p level. The 55-day moving average is now sloping upwards, ever so slightly, indicating a change in trend. The worst for Foxtons could be over.

One obvious reason for the weakness in these two agents might be that they have lost market share to cheaper, online versions – such as Purplebricks (LSE: PURP). The story here is almost the complete opposite. In terms of share price performance, it has done everything the traditional agents haven’t. From below 100p to over 500p.

Estate agents, housebuilders and the outlook for UK house prices Commercial Finance Network

However, even although both the one-year and 55-day moving averages are sloping up, indicating a rising trend, I would be nervous owning this stock. You could make the argument that it is fully valued: its market cap is over a billion, last year it was loss-making, this year its forecast P/E is 600.

But my main concern is that chart. It has double-top written all over it and my instinct says it has run out of steam at 500p. It is one that could easily come back to earth with a bump.

Property portal Rightmove (LSE: RMV) hit new highs at the beginning of the year, though those gains have since been given back. Looks like a range-trader to me.

Estate agents, housebuilders and the outlook for UK house prices Commercial Finance Network

Zoopla (LSE: ZPG), on the other hand, is now trending lower, having had an excellent 2015 and ‘16.

Estate agents, housebuilders and the outlook for UK house prices Commercial Finance Network

Are the good times over for the housebuilders?

So to the builders. These have been one of the success stories of the post-financial crisis era. And I’m going to use five-year charts for these.

Let’s start with the biggest, Barratt (LSE: BDEV).

Estate agents, housebuilders and the outlook for UK house prices Commercial Finance Network

I’ve got to say, based on hocus pocus charts alone, I would be very worried owning this stock. It, too, has got double top written all over it.

In October last year it looked like it was breaking out to new highs, but that’s proved to be a false break, and since then it has gone from 700p to 550p at some speed. I can’t help thinking 350p beckons.

Taylor Wimpey (LSE: TW) is telling the same story.

Estate agents, housebuilders and the outlook for UK house prices Commercial Finance Network

Persimmon (LSE: PSN) has been probably the stand-out performer, bucking the double top of the others.

Estate agents, housebuilders and the outlook for UK house prices Commercial Finance Network

It hit that same wall last October, and now it’s turned down.

Finally, here’s Berkeley Group (LSE:BKG), which peaked around the beginning of the year.

Estate agents, housebuilders and the outlook for UK house prices Commercial Finance Network

It has done extremely well.

Overall, it’s not looking good for property – but a crash is unlikely

I turned bearish on London new-builds in 2015, because of the over-supply of not-particularly-nice two-bed flats coming to market  (I was the first onto that particular story).

But it was impossible to be bearish on UK property as a whole, because, even if the estate agents were weak, the builders were strong. (There were also company-specific reasons for the agents’ weakness).

But looking now at the agents, the portals and the builders; looking at current property valuations; at the outlook for interest rates; at the stagnancy in the market, and the sheer cost of buying a place to live – it all makes me bearish.

Yet property remains a religion in the UK. For those that own, a house remains their most valuable asset. No government wants a property crash on their watch.

The market has become quite area-specific. London new-build remains a disaster zone. But in general my call is this: more stagnation and atrophy with a slightly downward bias, but a crash such as we saw in 1989, despite current overvaluations and demographics, remains unlikely.

Source: Money Week

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Why London’s buy-to-let landlords should consider remortgaging

Buy-to-let landlords have had plenty of change and financial challenge to endure over the past couple of years, as a series of new laws have impacted on their investment returns. With many coming to the end of the deal period of their buy-to-let mortgage, there could be a wave of remortgage business over the coming months, particularly affecting London.

But is remortgaging affordable and plausible for buy-to-let landlords? The last few weeks have seen conflicting arguments both for and against, underlining the confusing issues facing landlords. The answer lies in each individual’s circumstances and the information they are armed with, when making the decision.

A recent Standard & Poors (S&P) article titled ‘Buy-To-Letdown? Recent RMBS Loans Will Struggle With The Perfect Storm Of Regulation And Tax Hikes’, suggested that, as a result of the Prudential Regulation Authority changes introduced in 2017, many landlords will now struggle to refinance to cheaper mortgage rates, as they will fail to meet stricter affordability tests.

However, that theory has been blow out of the water by a new report, titled ‘Refinancing options are good news for buy-to-let market’, written by Carla Sateriale, manager, buy-to-let at UK Finance.

Sateriale states that the S&P research failed to take into account significant factors that skewed their conclusion.

She wrote: “There are several reasons why we don’t see a substantial jump in loss-making mortgages. The main reason is that throughout 2014, 2015, and 2016, interest rates were driven down by intense competition in the mortgage market. A borrower taking out a 2 year-fix in 2014 could expect to refinance onto a rate around 0.9% lower in 2016. Likewise, borrowers in 2017 could refinance under cheaper deals than were available in 2015. This would have helped cushion borrowers against the higher tax liabilities they would incur starting in 2017.

“We also suspect that the pessimistic view expressed in S&P’s research may be underpinned by the assumption that loans issued in the past several years would be ineligible for refinancing, due to the PRA’s new underwriting criteria. What is often overlooked is that the rules don’t apply to pound-for-pound remortgaging—so as long as there is no additional borrowing, a customer should be able to refinance even if they don’t quite meet the new criteria for stress rates.

“Modelled into these results are several assumptions: that the borrower is a higher-rate tax payer, incurs tax-deductible business costs which amount to 19% of rent, and, until 2018, refinances every two years to a rate in line with typical market rates. In 2017/18 and beyond, it’s assumed that borrowing costs for the landlord increase by 0.25% per year. In line with S&P’s assumptions, rent levels are held constant throughout.

“Eight years of holding rent fixed is a major contributor to the model’s prediction of 15% of 2014-issued mortgages becoming loss-making by 2012/22. In reality, it’s quite rare for PRS rents to be fixed for such a long time.”

Whilst much of Sateriale’s comments ring very true, in theory, maybe in practice it isn’t so easy. This is because, when the investor initially took out their mortgage, they would have been subject to very different affordability calculations than are now in place which means that if none of the capital has been paid off during the interim period, it could be harder to secure finance under the new rules.

However, there are other options available. A specialist buy-to-let broker firm will have the marketplace knowledge and expertise to investigate all avenues to find a solution and may suggest one you have not considered, or been aware of.

Why London could see a surge in remortgage business this year

In the early months of 2016, there was a rush from many investors to secure buy-to-let mortgages ahead of the April 1 deadline, when the new 3% stamp duty surcharge on second properties came into force.

With London property prices significantly higher than elsewhere in the country, that meant that the subsequent stamp duty costs often ran into thousands of pounds more for London purchases.

Little surprise then that so many landlords were keen to secure a purchase, before the added cost became payable.

The surge in buy-to-let business in the run-up to April 2016 was industry-wide. Many of those deals were over terms of two years and consequently, will come to an end in the weeks running up to April 1 2018.

But there are other factors which may shape a landlord’s approach, including the likelihood of further Bank of England base rate increases.

The Bank of England’s Monetary Policy Committee (MPC) has already hinted at possible future base rate increases, following on from the first rise in a decade, last November.

Speculation is rife that another base rate rise could occur as soon as May, although rumours have been proven wrong before. However, MPC members and Mark Carney, the Bank’s Governor, have hinted at the probability of further rates rises to combat the effects of inflation.

Historically such an event has served as a catalyst for the mortgage lenders to hike mortgage interest rates. So many landlords have considered insuring against this risk by remortgaging and locking into a fixed rate product.

With buy-to-let mortgage rates still exceptionally low, many landlords will undoubtedly be considering their options, this is perhaps more pertinent to London, for the reasons already expressed.

The UK Finance article sends a message of reassurance to buy-to-let investors and certainly in the right circumstances, there are good reasons for many landlords to consider remortgaging.

In November 2017, Savills predicted a significant exodus of landlords from the industry over the coming years, as a result of the government’s changes, supposedly making buy-to-let a less attractive investment proposition.

The latest English Housing Survey reported that in 2016-17, the private rental sector was the largest tenure in London, accounting for 4.7 million households. That equates to 20% of the housing market in the capital and 30% of people who live there, are renting privately, as opposed to 19% in the rest of the country.

Making the right decision is not only crucial for the investor, but also for the millions of people who rely on the private rental sector in the Capital and elsewhere in the UK.

The expertise of specialist brokers has a key part to play in navigating the complexities of buy-to-let and could help identify financial solutions which set landlords up for success, at a time when they are needed most.

Source: Mortgage Introducer

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The UK economy grew slower than Europe for the first time since 2010

  • The eurozone’s economy outgrew the UK for the first time since 2010.
  • EZ economic growth was 2.7% in 2017, according to preliminary estimates.
  • That’s compared to just 1.5% growth in the UK, whose economy remains under pressure from Brexit uncertainties.

LONDON — For the first time in seven years, the Eurozone’s economy grew quicker than the UK’s last year, data from Eurostat confirmed.

Eurostat released its preliminary growth estimates for the final quarter of 2017 on Wednesday, which showed the bloc of euro nations growing at a combined 2.7% over the course of the year, having expanded 0.6% in the final quarter alone.

“Industry helped drive the euro-zone’s 0.6% expansion in Q4, and the outlook seems bright,” Stephen Brown, an economist at Capital Economics said.

Comparatively, data from the UK’s Office for National Statistics released in January showed the UK economy growing by 1.5% in 2017, as the uncertainty surrounding Brexit dragged on both consumption and investment, slowing growth down.

By contrast, the eurozone is positively flourishing, as it finally kicks into gear following years of recovery from the debt crisis which plagued the Single Currency area from 2011 onwards.

Wednesday’s data is no great surprise, and came in in line with forecasts, but does act as confirmation of the divergent economic fortunes of Britain and its neighbours across the channel.

“Overall, these data confirm that the expansion in the Eurozone is broad-based across all the economies,” Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics said in an email.

The broad based expansion of the eurozone economy is once again in contrast with the UK, which remains heavily reliant on the dominant services sector for the majority of its growth.

“The dominant services sector, driven by business services and finance, increased by 0.6% compared with the previous quarter,” the ONS said in its January release.

Source: Business Insider