The Latest Bank Of England Base Rate Decision is in…..
The year is what you make of it, start now.
I love a good quotation, and this really is accurate, and must ring true with our clients if our diary has anything to go by. 2024 has started as we mean to go on.
Our diaries are full, and we are helping lots of clients for all sorts of reasons. The second week in January we saw 82 clients in 6 days! What a great start to the year for our busy team. There has been little time to “settle back in” and enjoy the tins of biscuits left over from the festive break!
The headlines are true, and we have seen rates drop.
The most competitive 5-year rate we have seen recently – 3.85%
The most competitive 2-year rate we have seen recently – 4.09%
The most competitive buy to let product we have seen recently – 3.54% (2 Year Fixed Rate with a 3% Product Fee)
These products were sourced on the 30 January 2024, for new purchases at 60% LTV (loan to rate value).
This headline did catch my eye this week and I will be following this up with our Lender Business Development Managers
“How would 1% deposit mortgages work for generation rent?” (Source Independent 22.01.24)
From what I have read so far, it’s a scheme being considered by the government encouraging 99% LTV (loan to rate value) mortgages to help first time buyers onto the market using a 1% deposit contribution, with the government guaranteeing part of the loan.
The New Build Help to Buy scheme, which was a government backed scheme aimed to help first time buyers who had a 5% deposit, with up to a 20% equity loan in the property finished last year, and there is currently “the mortgage guarantee scheme” in force which was supposed to end last month, however has been extended until 2025. This scheme attempts to encourage lenders to offer 95% mortgages as there was limited availability of these after COVID.
Are the new rumours true and will it be the magic want people need, and how will it affect affordability calculations with lenders? I will be keeping a close eye on this!
Coming up – KEY DATES FOR OUR DIARY:
The base rate has been held for the 4th consecutive time at 5.25% by the Bank of England yesterday afternoon.
As always, if you want to see how this affects your current offer please contact us and we can book in a quick check up and review your rate.
Spring Budget 6th March
What is keeping our diaries busy?
As already mentioned, we have been busy! But why are people having appointments this January? Here is a taste of what we are discussing in our recent appointments.
- Lots of people we are seeing want to discuss re-mortgaging as their products are due to expire. Clients have been waiting for rates to come down and are now booking in. Just bear in mind that a re-mortgage can take around 2 months, even though it’s not as complicated as your initial purchase, there are still steps that need to happen that add time, such as valuations and basic conveyancing, and leaving it too late could mean you potentially complete late and have to make a payment on your existing lenders SVR ( standard variable rate) before a new one starts. The best advice I can offer is to come in sooner- up to 6 months before, and we can set everything in motion, then we just monitor rates and apply for lower ones if they are available.
- There has been a huge appetite for moving house in January. Engaging with us early on is the key so you know what value of properties to target when booking viewings, and what your monthly repayments will look like. We often get asked can you move your current mortgage to a new property? A lot of the time yes, it just depends on the terms and conditions on your current offer, however many lenders do allow this, and it is called porting. We can double check your current offer for you.
- Estate agents will ask for an AIP (agreement in principle) when you view a property. We can arrange this for you. It’s a document which confirms you have passed a lenders initial check and how much they will lend to you. Once you have made an offer and it is accepted, then the next step would be a sign-up appointment to turn the AIP into a mortgage application. An AIP normally has no impact on your credit score, and although it doesn’t guarantee you a mortgage, it plays a key role in your mortgage search.
- Self-employed clients asking for advice on how many years accounts they need to apply for a mortgage. Broadly speaking it is at least 1 year. The 22-23 self-assessment deadline expired on the 31 December – and the next key date for self employed clients is 5 April onwards when a 23-24 self-assessment can be filed with HMRC.
- In 2023, our buy to let clients and ourselves were frustrated with the rates not dropping as quickly as the residential ones, but the start of 2024 has seen some massive improvements in the buy to let offerings. It is definitely worth a discussion if you have any properties with products which have expired or are due to expire, or you are looking at purchasing a buy to let. Kate, Kelly and Louise in particular are extremely experienced in this area.
- Clients who have a joint mortgage and have split up from their partner and want advice on what their options are.
Often when we have seen you and advised on the best product, it can be up to 6 months before you complete on your mortgage, whether it be a property purchase or a re-mortgage. The offer you receive from the lender is usually valid for 6 months. Many people ask us what happens if the rate changes in the 6 months before completion?
Well, if the rate goes up, you have the safety net of the lower rate you secured by arranging this early on. We continue to regularly monitor the rates for you, and if we identify a lower rate before completion, then we will apply for the new lower rate for you.
The lenders will not contact you to tell you rates have been reduced, this is a service our advisors provide and go above and beyond to ensure you benefit from rate reductions. If this wasn’t a reason in itself to see a broker, I don’t know what is. Our advisors will know the best lenders/products to apply for initially as well, to ensure you can change to a lower rate.
Here are some recent examples of where we have saved our clients’ money by identifying lower rates up until completion! (some of these haven’t completed yet so may see even further reductions!)
Client 1 who is moving house. Monthly payment on first offer £3105.04 and now £2849.05, so a monthly saving of £255.99 (saving over 2 years £6143)
Client 2 a first-time buyer. Monthly payment on first offer £2230.36 and now £2020.88, so a monthly saving of £209.48 (saving over 2 years £5027)
Client 3 who is doing a product transfer (re-mortgaging but staying with same lender) Monthly payment on first offer £1291.19 and now £1157.99, so a monthly saving of £133.20 (saving over 2 years £3196)
I started with a quotation so will end on one! Being busy and being productive are two different things! I plan for us to be the latter this year! Every appointment we have there is potential to help someone, whether it be immediately, or offering advice for people where their situation may mean it is more of a long term process, with us checking in with clients over time, ready for when we can help them, and making sure they are prepared for the next step when that time comes. There is no point having a busy diary if we don’t continue to be productive for our clients at every step of the way.
I am extremely optimistic about 2024, mainly because we survived 2023 and have proven how resilient we are! Being ready for the unpredictable is half the battle. I have the best team in the business and know we will continue to rise to the challenges thrown our way in this still unpredictable market.
My advice currently would be to book ahead to avoid disappointment. Generally speaking, we can usually find availability during the week for people who want to see us urgently. Where we book up quickly is Saturdays and the first and last appointments of the day during the week. We often do have flexibility during the day though, for example over people’s lunch breaks. We have two offices (Redditch and Kings Norton) approximately 15 minutes driving distance between each other, so if you can’t get an appointment immediately at the office most local to you, it would be worth looking at the other office for a face to face meeting , or to have your appointment via a team’s call.
100 The Green, Kings Norton, Birmingham, B38 8RS
Birmingham Mortgage Advice is a trading name of McTernan Financial Ltd who are an Appointed Representative of PRIMIS Mortgage Network, a trading name of Advance Mortgage Funding Ltd. Advance Mortgage Funding Ltd is authorised and regulated by the Financial Conduct Authority.
Registered Office: 8 Church Green East, Redditch, B98 8BP. Registered in England and Wales. Company number: 09168296.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
Most Buy-to-Let Mortgages are not regulated by the Financial Conduct Authority.
The guidance and/or advice contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK.