I hope you have enjoyed a successful beginning to 2016 and it is treating you well!
So what has been happening and what does the future hold?
Halifax and Nationwide have slightly different opinions on how things have gone over the last month and year but it does not really reflect what many people have been experiencing on ground level.
Halifax have the following figures for February:
Annual change in prices = increase of 9.7%
Monthly = fall of 1.4%
Quarterly = increase of 3%
Their picture is quite positive but it is qualified with the expectation that price growth will ease further ahead as house price increases exceed wage growth and affordability becomes an issue.
Nationwide's take on the data is slightly different:
Annual change in prices = increase of 4.8%
Monthly = increase of 0.3%
There does seem to be more property coming to the market now and activity should return to normal levels shortly when we see the end of the rush for landlords to scoop up every available property before the stamp duty increase takes place.
But overall it is a good start to the year and we would expect activity levels to remain high but prices to level off over the course of the year.
This blog has been caught out many times with interest rate predictions and rises that have never materialised. This is due to the rapidly changing economy and the fact that things never seem to go well enough for long enough!
It is only just over a year ago that we were predicting that the first rise would be at the end of 2015! Still waiting!
So what does everyone think now?
The Telegraph now expects the first rise to be in December 2016 or January 2017. However, their interpretation of the markets leads them to believe that it could be as far off as August 2019.
The changes in the forecasts are really down to the recent stock market turbulence, weaker than expected UK growth, UK deflation, plunging oil prices and comments from the Bank of England.
Despite what the markets are implying, most forecasters (who are nearly always wrong!) expect the rise to be any time from November 2016 onwards - but certainly at some point in 2017.
Helpful? Not really, I know!
Despite all the confusion as to what may or will happen, interest rates will be going up at some point soon and so it is better to be prepared now for when it does happen.
The Mortgage Market
We are due for even more changes and the introduction of even more new rules when the "Mortgage Credit Directive" becomes live later this month.
I will deal with the impact this will have in a separate upcoming issue shortly - so keep checking the site for updates.
The mortgage market itself is constantly evolving and recently the main focus of lenders has been on buy to lets and making them a little more costly and a little harder to obtain. As mentioned last year, rental calculations have tightened up with many lenders meaning you get less mortgage for your rent.
Other changes have seen many lenders withdraw from offering mortgages to people paid in a foreign currency.
On a positive note, there has been a slight easing of criteria on interest only mortgages for residential purposes. Don't get too excited yet - you still have to jump through 70 hoops to get one - it's just that this is 5 less than a month ago!
In short, if you earn more than £50,000, have equity of at least £150,000 with a loan to value of less than 60%, then it MAY be just about possible. If you don't meet these three quick criteria points, resign yourself to a repayment mortgage.
In general, the mortgage market is buoyant. Interest rates are low and lenders are showing an appetite to lend money. There is real value in the long term fixed rates (5 years) and processing times are not too bad with all lenders.
So quite positive on the whole!
That's all from me for now - please feel free to get in touch if you wish to discuss anything contained in this update. Either email me firstname.lastname@example.org or call me on 0844 736 1920.
Hope to hear from you soon.
YOUR PROPERTY IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE