The Bank of England base rate remains unchanged at it’s lowest ever level – just 0.1%. Still seems unbelievable doesn’t it?
The prospect of negative interest rates seems unlikely given the other monetary tools at the disposal of the authorities, so if feels like that 0.1% is going to be around for a while. And that means low interest rates for borrowers who can show a good credit history and have a large deposit.
Now that the lockdown is starting to lift a bit, we can see how mortgage lenders are reacting to this new world of ultra low rates and the Covid19 measures.
When the pandemic first hit, lenders withdraw all their products from the market. They are now releasing their new rates and terms, and two things stand out. Investor and First time buyer products.
Investors – The rates for investors and buy-to-let are just incredible. In a good way. We are seeing rates for 5 year fixed buy to let mortgages around 1.6% for up to 60% loan to value. With rental property yielding typically 4.5% – 6% depending on what you buy and where, that represents a fantastic opportunity for investor buyers. Savings accounts are paying sub 1% with no prospect of long term capital growth.
Very few investors seem inclined to pile into the stock market right now which explains why we are seeing so many enquiries from investor buyers. The lettings market is hot – we urgently need more property for waiting tenants.
First Time Buyers – Life is not quite so simple for First Time Buyers. There are currently virtually no 95% loans available, and 90% mortgages are very restricted, despite high demand. This makes things hard for FTB’s with a 5% or 10% deposit – and makes it essential to take independent mortgage advice before starting to view and setting your heart on a house or flat.
So our advice to First Time Buyers is clear – come and talk to us and get armed with a Decision in Principle from a lender. Then you can go out viewing with confidence and in line with Government Guidelines – which make it clear that only serious buyers (that’s those who can get a mortgage) should be viewing.
Here at Trigg & Co we can offer you independent mortgage advice from a local broker, who knows exactly what lenders will and won’t do. So if you are a FTB, the message is clear. Give us a call and get your mortgage arrangements in place before you start to view.
Investors – we have some star buys just waiting to be snapped up. Please call us for details!