Well here we go… new historic lows for interest rates. Wow! It was not long ago (for the past three years, if my memory serves me right) we were warning people of what to do to prepare for interest rate rises and the implications on your household costs. Now, of course, for those of you on tracker rates, the likelihood is that your mortgage is going to fall.
How much by? Well around £20.83 for every £100,000 you have borrowed if you are on an interest-only mortgage.
That might not sound much, but it adds up to nearly £250 a year. And that can help pay off some of your bills, your mortgage or even just mean a bit of an extra spending spree – especially as a fall in interest rates means there doesn’t seem much point popping it into a savings account!
Well we are truly in uncertain times. Here are some of the game changes our property market has seen, is experiencing and can expect over the next 12 months:
Oh, and the Brexit vote seems to indicate at the moment that the economy might slow down, inflation will rise (ie, the cost of living will go up) and the fall in sterling has made property across the UK substantially cheaper than it was to international investors!
So we are genuinely in a new phase with different parameters at play in the property market and it would be a very brave person who would predict what happens next.
The biggest problem is that, to be honest, it’s very difficult to see any national trends any more; trends are increasingly localised, with some areas seeing great growth in one and two-bed flats, other areas seeing these in over supply and an under supply of houses to rent and to buy.
If you are already a homeowner with no intention of moving, don’t worry too much! If you have a mortgage, double check with your lender if the saving will be passed onto you. If you haven’t reviewed your financial objectives and mortgage over the last six-12 months, do so; you could save an absolute fortune and secure some amazing long-term low rates (not that we know what is going to happen to rates in the future!).
If you are a first-time buyer, it’s a bit of a tricky decision whether to buy now or wait. If you buy now and prices fall, you may feel miffed unless they rise again. But, buying now many mean you:
And you may even secure a property at a lower price than it will cost in a few months/years if the economy isn’t affected that much and prices start rising again.
First-time buyer? Download our essential FREE eBook for first-time buyers, which tells you everything you need to know.
For investors, it’s a tricky time. The government is clearly backing large property investors such as developers and insurance companies/large institutions building and renting substantial numbers of properties. However it’s doing its level best to curb individual investors with increased taxation:
So basically, if you are investing in property and haven’t done so already, you seriously need a full financial review of your individual circumstances. Without this, you may end up not earning anything like what you expected from property investment, especially if prices don’t perform as well over the coming years.
Not sure what to do? Worried about who to turn to for advice? Then do get in touch, we don’t sell you anything, we just give good, independent help and advice on who to can help you, based on your individual circumstances. And, we don’t take commission from anyone, so it’s up to you who you do/don’t work with!