What’s new in mortgages…

What’s new in mortgages…

While this summer’s weather has been miserable; there has been no sign of a summer slump in the mortgage industry. Homebuyers borrowed more this July than in any month since the financial crisis in 2008. Mortgage lenders are still lowering their rates, allowing buyers and re-mortgagers to lock into record-low deals, while any interest rate rise might have been pushed back to autumn 2016, in the wake of the China stock market crash.

There's also positive news from the Council of Mortgage Lenders (CML), who recently announced that lending has hit a seven year high, with gross mortgage lending reaching £22 billion in July. This is 9% higher than June (£20.1 billion), 14% higher than July 2014 (£19.4 billion) and the highest monthly figure since gross lending reached £23.6 billion in July 2008.

These figures have been made possible thanks to cut-price rates of mortgage interest that are still being slashed - especially for those with deposits of 30% or more - and a fierce level of competition among lenders to secure business. The Yorkshire Building Society is offering fixed rates for two years for as little as 1.07%; five-year rates as low as 2.19% are being offered by the Nationwide, and the TSB and Nationwide have ten-year fixed rates at 3.14% - giving long term certainty to those who like to sit tight in turbulent times. Even first-time buyers and landlords can enjoy the attractive products. Santander has recently reduced three high LTV products to offer its lowest ever rates for first-time buyers and also refreshed its buy-to-let product range for the better.

Although the mortgage market is in good health, the style of lending is changing to suit the wider economy. Many buyers are now searching for mortgages with terms of up 30 years in order to help them budget and accommodate rising house prices. In fact, more than 20% of buyers searched for a long-term loan outside of the normal 25 years in the second quarter of 2015, according to brokerage service the Mortgage Advice Bureau – up from just 8% in the same period of 2014.

If you would like mortgage advice, details of properties for sale in Hampstead and surrounding areas or news of the London rental market, please contact TK International today.

Photo by Simon Cunningham