Could this be a ‘bumper year’ for North East property prices?

Are changes to stamp duty and pension reforms bringing a bounty of new buyers to the market, creating a bumper year for North East property?

The announcement last year on the changes of Pensions are due to come into effect this April these will allow savers over 55 greater freedom to take their pensions as a lump sum, with a so called “silver landlords” likely to take advantage of the return on their investment offered by buy to let properties by buying homes to rent out pushing up prices.

Chancellor George Osborne also announced in December’s autumn statement the homebuyers that are purchasing properties with less than £937,000 will pay less stamp duty cutting £1000 from the cost of buying a North East home and encouraging more buyers into the market.

Expected delays and low inflation in lifting interest rates have also led to suggestions of a “mortgage price war” as several major lenders launch New Year “record low” fixed-rate deals.

Mortgage approvals, this week have hit a 17-month low and are 23% down on this time last year.

Ajay Jagota, founder and Chief Executive Officer of KIS lettings agents, nonetheless predicts a “bumper year” for North East property

“Despite what the doom-mongers might tell you, 2015 has all the makings for a bumper year for North East property. The ease of pension regulations will undoubtedly bring more purchasers to the market both as owner-occupiers and buy-to-let investors, rising up prices.  At the same time, stamp duty changes will make it cheaper and easier to buy a home. The North East rental yields are as good as any in the UK and as rental returns rather than capital appreciation are key to making money out of property, out region stands to gain the most. As a result I think we can expect to see double digit house prices growth in the North East 10% seems a good bet with rents set to rise in the region of 6%

North East have all the correct conditions existing  , low prices, high rental yields, strong demand, affordability of mortgages – means that if buyers and investors decide 2015 is a time to buy then self-fulfilling prophecy could raise prices just like they did in London.

As a result, bargain hunters need to strike early to get the best deals, and should stick clear of  signing lengthy tenancy agreements if they’re renting at the moment and are looking purchase”

New BTL lender Fleet Mortgages opens its doors for business

Specialist lender Fleet Mortgages and BTL has announced that it is now actively accepting business through its distributor partners and their affiliated members and advisers.

Currently the lenders products are currently available through The Business Mortgage company , legal &General Mortgage club, Mortgages for Business, The Buy to Let business, Mortgages for Business, the Mortgage trading Centre , Professional & Commercial and Solent Mortgage services.

Fleet Mortgages are opening out its distribution to the rest of the adviser market late 2015

Product range highlights include:

  • A two year fixed rate 65% LTV individual buy-to-let product price at 2.79%
  • Individual buy-to-let tracker options for three years at 65% LTV -2.85%; 75% LTV -3.35%; and 80% LTV- 4.75%
  • Two year limited company fixed rate buy-to-let products priced at 4.39% (65%LTV), 4.59 %( 70%LTV), and 5.29% (80%LTV). Three year trackers rates priced at 4.55% (65%LTV), 4.75% (70%LTV), and 5.25% (80% LTV).
  • Two year Fixed rate HMO buy-to-let products priced at 5.29% (65%LTV) and 5.39% (75% LTV)

“ This is a momentous day for the Fleet Mortgages” said by Bob Young , Chief Executive Officer of Fleet Mortgages he went on to say team and all our stakeholders as we open our lending doors and begin to accept business through our distribution partners. We have brought this lender to market in record time and are lending at what is a extremely exciting time for this fast growing and developing but-to-let market. We focus our products on areas which are currently underserved, particularly in the limited company and HMO market; we truly believe this range should particularly appeal to our target customers and experienced landlords

If it wasn’t for our support from our partners in all areas of business we would have not got to this point so quickly, plus the hard work of everyone in the Fleet mortgages team. Our focus now moves for pre-launch to active lending and we are aiming to deliver a very high quality of service which will be ensuring open communication and transparency between ourselves and advisers.  This is a long term project and we are looking forward working with the buy-to-let advisory community in order to develop a proposition which meets their needs their needs and those of their clients.”

Andy Young, CEO at The Business Mortgage Company (TBMC), said “I am Delighted that fleet Mortgages has chosen TBMC as one of its distribution partners from launch. Fleet Mortgages has a compelling proposition in the buy-to-let mortgage market and I am sure Bob Young and his management team will grow a very successful business”

Mortgage rate rises expected this year

According to the latest findings from Barclays and the Centre for Economics and business research, nearly half of homeowners who have a variable rate mortgage aren’t aware of the rise in their repayments could rise this year.

This report also revealed that 46% couldn’t remember what the current BoE base rate is, 61% of them have no idea when they might rise and 88% are Utley unaware of BoE’s recent interest rate forecast.

As a direct consequence, a reported 76% have not been putting money aside for the rate increase, Despite CEBR predicting a minimum total mortgage payment rise of £723.8m nationwide.

In this study home owners cited different political and regulatory  statements in this study changed market commentary and conflicting family views  has been the main reasons behind this widespread uncertainty.

The sheer lack of awareness could contribute to the UKs mortgage holders experiencing financial difficulties in 2015, as CEBR predict that household owners could face a potential £1.1bn total increase in mortgage repayments by the end of the year.

This is solely based on CEBR’s  sharp but potential  model Suggesting threw rates rises in 2015 “ taking the average base rate to 1.25% by December 2015

Even a rate rise of 0.25% in May 2015 would see homeowners across the nation paying an additional £101.33 on average

At the very minimum CEBR predicts a average annual of £81.12 increase in mortgage payments for individuals by the end of 2015.

This Survey also found that 45% of homeowners felt that they could possibly miss out on better mortgage rates and so they paid out more because they were not sure whether not to fix or change their mortgage.

For those between the age of 30 and 49 they are facing the largest hike in their mortgage repayments, with the potential £362.1m increase in total mortgage repayments.

Regionally, the biggest rises in repayments are for those living in the South East they can expect a rise in payments totalling to £158.9m

The Scots are least likely to put money aside for potential rise in interest rate, with only 10% saving their mortgage repayments going up. In Wales Welsh home owners are more likely to save, with a third of them putting aside money even though their potential mortgage increases are not as large as other areas throughout the UK.

However, CEBR Have Predicted that London’s homeowners can expect a reduction of £20 per person on their mortgage repayments by the end of 2016. However , if you take the region as a whole, the total mortgage repayments increase by £124m as the number of Mortgage paying households in the Capital has increased

Introduction of rent control gets public backing

A new poll has found that less the 10% of Brits are not in favour of Mandatory legal limits being imposed on housing rents. This Poll is based on a survey done on behalf of Generations rent which asked over 1000 people and has found out that only 6.8% said that they were either strongly against rent control or somewhat against it.

The Full question that was put to the respondents last month read:

“Over Recent years, rent have been rising faster than the average wage in the UK. In some cases, people support a system of “Rent Control” “Where the government has limited the rate at which rents can be increased disputing this would make renting more affordable for tenants. Others have opposed “rent control” stating that it would lead to a shortage of properties landlords were willing to rent out.

Now the question asked is would you support or oppose the proposal in which the Government would introduce a “Rent Control” System in the UK?

Out of those asked, 59% of them backed rent control and thought it was a good idea, 34% openly said that they didn’t have an opinion on the matter. Throughout all political parties rent control was popular. UKIP had 58% of their party voting yes, alongside 55%of the conservative supporters, 68% of labour Supporters and 70% of LibDems Supporters all backing controls.

77% of the Private Sector tenants were in favour of these measures saying it was a great idea. There was also a high level of endorsements from homeowners 56% of whom backed the measure

Commenting n the findings, Generation rent director Alex Hilton said the results “indicate a concern and sympathy for the older generations and for a large amount of the younger generation that have been condemned by high house prices and to a life time of rent slavery”

He added “Private Sector are now spending upwards of 40% of their income on rent. By supporting rent control, politicians will have an opportunity to do something that could have a real, beneficial impact on millions of people whilst also saving tax payers money through the housing benefit bill, £9 billion of which would go straight into the pockets of private sector landlords