This week the best rate in both the moving home and remortgage charts was 1.26% discounted variable for two years. For first-time buyers the best rate on offer was also a variable rate of 2.54% discounted variable for two-years. While variable rates were the most competitive rates across all the charts, there were still good deals that could be found within the fixed rate charts across all mortgage types.
A deposit of £1,000 was needed by savers to get the best rates in both the fixed rate bond and notice account charts this week, with the top rates in these charts being offered at 2.76% fixed and 1.92% variable respectively. Savers with a lower deposit could still get a competitive rate within these charts however those with a deposit of less than £500 would find more choice in the easy access saving chart where the top rate on offer was 1.50% variable for a £1 deposit.
A report on the Government-backed Help to Buy Equity Loan scheme has been published by the National Audit Office.
In the report it was revealed that two-fifths (37%) of buyers would not have been able to purchase a property without the support of Help to Buy, which it estimates to have led to around 78,000 additional sales of new-build properties since the scheme started. In addition to this, the scheme has helped younger buyers onto the property ladder, as 63% of first-time buyers were aged 34 and under.
While 81% of Help to Buy loans were provided to first-time buyers, the scheme was intentionally set up to be accessible to a wide range of property buyers. As a result, homeowners were able to use the scheme to purchase a larger or more expensive property, which resulted in 19% of buyers who previously owned a property using the scheme to buy, on average, more expensive properties than first-time buyers.
Furthermore, 31% of buyers said that they could have purchased the property they wanted without the scheme, which the report estimates to have led to 65,000 households using the scheme who could have purchased the house they wanted without it. In addition to this, over the whole scheme, 10% of buyers had household incomes over £80,000 (or over £90,000 in London).
According to the report, 5% of buyers were in arrears who bought in the first 11 months of the scheme, which is above the national average as according to figures from UK Finance, in the first three months of 2019, 2.5% of homeowners were in mortgage arrears. These homeowners may find themselves in difficult circumstances as the report states that buyers who want to sell their property soon after they have purchased it might find themselves in negative equity, mainly due to the fact that new builds typically cost 15-20% more than an equivalent ‘second-hand’ property.
The average weekly income of recent retirees is one fifth (20%) higher than that of older pensioners, according to Aegon’s analysis of the latest Government figures.
Analysing the data in the Pensioners’ Income Series published annually by the Department for Work and Pensions (DWP), the net average weekly income (after tax, national insurance (NI) and council tax) of recently retired* pensioner households is £392, while the net average weekly income of non-recently retired pensioner households is £326. This represents a 20% difference between recent retirees and older pensioners.
The news that a cross party group of MPs has launched an inquiry into the plight of mortgage prisoners has brought hope to many of those ordinary people trapped in their current deal.
The problem of mortgage prisoners has its roots in the global financial crash of 2008. Prior to this point lenders had a more relaxed approach to checking that customers could afford the mortgages being offered. Following the banking crisis, the Financial Conduct Authority (FCA) made these regulations much more stringent, with the aim of preventing borrowers obtaining mortgages which they couldn’t afford.
While these tougher rules have worked to prevent consumers from over-reaching themselves on their mortgage commitments, it has left many thousands in the trap of being unable to obtain a new remortgage deal – even though they might well have had no problems with their mortgage repayments and are in good standing with their lender. Being unable to move to a new deal because they cannot pass the new affordability checks leaves those affected stuck on a higher standard variable rate (SVR) paying potentially thousands more per year.
However, the good news is that last week the All-Party Parliamentary Group (APPG) on Mortgage Prisoners submitted a cross-party motion designed to begin scrutinising what can be done to assist those trapped on higher rate mortgages. It is hoped that by stepping up pressure on both the FCA and the Treasury some people in the UK can be freed from their current mortgage prisons.
If you are a mortgage prisoner the APPG is interested in hearing your story, please email them at APPGmortgageprisoners@gmail.com . If you need help to remortgage please speak to our preferred mortgage broker for advice.
13th June 2019
Since the introduction of tougher affordability tests some borrower's have found themselves trapped in an expensive mortgage with no way to move to a better deal - So called 'mortgage prisoners'. Now MPs are seeking ways to help.
MP's have begun moves to deal with the problem of 'mortgage prisoners'
12th June 2019
The results of the 2019 Moneyfacts awards are in! Find out which companies walked away with one of our coveted awards!
The results of the 2019 Moneyfacts awards are in!
12th June 2019
The Moneyfacts Weekly Product News is a round-up of the latest products or rate changes to hit the consumer finance market over the past seven days. The deals are available right now, but may be subject to change.
The Moneyfacts Weekly Product News is a round-up of the latest products or rate changes to hit the consumer finance market over the past seven days.
10th June 2019
Product competition in the buy-to-let (BTL) market has increased significantly and is at its highest level since the beginnings of the financial crisis in October 2007, data from the Moneyfacts UK Mortgage Trends Treasury Report will show
Product competition in the buy-to-let (BTL) market has increased significantly and is at its highest level since the beginnings of the financial crisis in October 2007