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Mortgage Views from Cruze

I haven’t sent an update for a while but I feel like there is once again quite a bit of mixed news and uncertainty so thought it was a good time to update. Frustratingly rates are back in the 5% region. The figures below represent a 50% remortgage. The rates for purchases, higher loan to values and different types of product vary quite a lot but I can’t represent every scenario here.

50% LTV Remortgage Rates

2 year fixed 5.08%

5 year fixed 4.51%

2 year tracker 5.75%

I think most people were hopeful that rates would have reduced by now. However the general global picture just keeps kicking the can down the road. The reality is nothing much is going to change until we are past the election. The Bank of England typically do not move rates in an election run up in case it is seen as a politically influenced move. I don’t think much will happen August. Meanwhile, the situation in the Middle East, Russia and Trump plus the election result itself could all cause further instability/uncertainty and kick that can even further. This weeks news looks like the US are delaying rate cuts as well. I was taught early in my career ‘when the US coughs the UK sneezes’. As I’ve mentioned before, when the rate cuts do start they will be slow. 0.25% in August and probably one more quarter towards the end of the year. By the end of 2025 some are predicting a cut down to 3.5% which is 1.75% down from where we are. I don’t think rates will be cut much further than that or maybe even as fast as that. Overall, the headline message is higher rates are here to stay. The idea of holding out is getting more and more painful and if you are waiting for cuts they’re probably not going to be substantial. Higher rates are here to stay.

The mortgage lenders have all massively caught up with the higher cost of living. I’m seeing much much tighter affordability being given by lenders and they’ve now all caught up with higher costs of utilities etc which they factor in to their calculations. It’s definitely squeezing what people can borrow. If you got affordability figures 6 months plus ago I would double check they still stand. However, there are a few new schemes popping up to try and help. There’s one in particular that I think is really good for decent earners who are struggling with the crazy cost of rent but don’t have much of a deposit.

For properties up to a maximum value of £500,000 you only need a deposit of £5,000. It’s available for houses only and not for flats or newbuilds. At least one applicant needs to be a first time buyer. It’s only available for people with pretty decent credit and only on a 5 year fixed. It could be a good solution for some clients.

I’m always asked ‘is it a good time to buy’ or sell or whatever else. For the last year it’s been a terrible selling process and buying has been strained as there isn’t much stock on the market. However, if you’re a first time buyer confident enough to go for it I think it isn’t actually a terrible time. You can negotiate, you won’ t have as much competition and if you get used to mortgages when rates are high it’s only going to get better one day. There’s a couple of other schemes floating around for first time buyers especially involving newbuilds and developers. Contact me if you’d like to know more.

For home movers, selling might be a bit painful. You might have to accept less. However, if you’re moving upwards you should be able to then pass that on to negotiating on the bigger purchase which might mean you can win. Deals are still being done and there are people that need to move. Lenders have money to lend if you are in a good place to borrow. They’re quiet so service should be better compared to the post covid years.

For landlords, the future is not looking great. It is likely that we will have some form of government change in a few weeks and whichever form that takes will not be landlord friendly. There’s been an 11% rise in buy to let repossessions. If the higher costs are here to stay and policy becomes even more hostile towards landlords I can see a mass exodus very imminently.

If you’re unsure or worried or want to know more about any mortgage related news and how it applies to you please do ask me. I’m always happy to talk through and help you prepare for your own mortgage changes.

Feel free to forward on to others. If you want to discuss any aspect of mortgage stuff book in with me here https://calendly.com/sarahcruze/30min​

If you don’t want to be included in this list please do let me know and equally if you have friends or family who would benefit from the updates send me their email address and I will add them! And don't forget I can also help you with wills, life insurance, equity release, lasting power of attorney, buildings and contents insurance and much much more!

Sarah Drakard DipFA DipMAP CeMAP CeRER MLIBF

Independent Financial Adviser - Residential/Buy To Let/Commercial Mortgage Broker - Equity Release Adviser - Insurance Broker - Will Writer

0330 33 22 615 | 07931 702 681 | sarah@cruzefs.co.uk

www.cruzefinancialsolutions.co.uk




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