Newsletter February 2015

Encouraging Signs for the Market in 2015

2014 was another year of growth in the Scottish property market. In the third quarter, there were 7,500 first time buyer loans, an increase of 15% on the same quarter in 2013. Figures from the Council of Mortgage Lenders (CML) also revealed that during this period, first time buyers borrowed £810 million, an increase of 23% compared to the same period in 2013.The UK as a whole saw mortgage approvals reach approximately £207bn in 2014, an increase of almost 17% on 2013’s £176 billion figure. This clearly demonstrates buoyant times within the housing market and encouraging signs of an industry becoming energised by strong growth. This is further reinforced with mortgage lending predicted for further growth of around 7% to £222bn in 2015.

The first time buyer market looks particularly strong, with transactions making up 46% of all mortgaged house purchases in 2014, up marginally from 44% in 2013. This is set to continue with further lending support for high loan to value products and first time buyer exclusive offers.

The recently announced pension and revised stamp duty reforms will help reignite the market. This, coupled with additional funding in place for the Governments Help to Buy scheme, the housing and mortgage markets appear to be well supported by favourable economic conditions. The outlook for the year therefore remains positive.

Mortgage Price War

In the latter part of 2014 we witnessed a developing mortgage “price war” which has intensified over recent months, with lenders continuing to battle for custom. With interest rates set to remain stable we expect this price war to continue and to benefit customers of all mortgage types.For example, Clydesdale Bank re-launched its mortgage range, to include a two year fixed rate deal available to first time buyers, homemovers and those looking to remortgage. It comes with a competitive rate of 2.89%, matching the lowest rate in this sector. It’s available up to a loan-to-value of 90%, with a competitive fee of £999. With a highly attractive rate, it’s ideal for first time buyers who can acquire the necessary 10% deposit. The deal is further enhanced with an excellent incentive package, including a £1000 rebate on completion.

For customers with a larger deposit or equity in their home, they can take advantage of some very attractive mortgage deals, including a two year fixed rate product available from Yorkshire Building Society. It comes with a headline rate of 1.29%, offering a maximum LTV of 65%. The product fee of £975 currently positions this deal as market leading in this segment. The mortgage is portable, allowing you to make overpayments of up to 10% of your remaining loan every year.

We now have access to over 10,000 mortgage products, including broker only deals on 95% mortgages. Together with our “Best in Market” mortgage guarantee and as well as providing free impartial mortgage advice, we are confident our mortgage advisors can find the best deal for all our clients.

Help to Buy Update

The number of purchases under the Help to Buy scheme reached more than 54,000 by the end of the third quarter in 2014. According to the Department for Communities and Local Government (DCLG), there were also 5,500 sales under the Help to Buy: New Buy scheme and 15,000 supported by the Help to Buy mortgage guarantee scheme. The values of properties bought by the scheme totalled £7.14bn, which in turn was supported by equity loans worth £1.42bn.These figures clearly continue to show the continuing growth of Help to Buy and demonstrates its success in supporting hard working people in making that first all important step onto the property ladder.

Help to Buy Mortgage Guarantee – Woolwich have recently reduced selected fixed rate deals by up to 0.70%, including the two-year Help to Buy mortgage Guarantee product. The deal now has a very competitive headline rate of 4.49%, currently the lowest rate in its sector with up to 95% LTV. It comes with no products fees and there’s flexible repayment options giving borrowers the opportunity to make overpayments of up to 10% of the outstanding balance. Homemovers and first time buyers looking to get on or move up the property ladder with a small deposit are likely to find this offering very appealing.

Help to Buy Equity Loan – Santander who have been active in the Help to Buy sector, offer a two-year fixed rate Help to Buy Equity loan product. Available to a maximum LTV of 75% and an initial rate of 3.24%, this product comes with no booking fees and offers a free valuation package, which further sweetens the deal for homemovers and first time buyers alike.

Help to Buy (Scotland) Funding – Applications are now being accepted for funds to be used from the 2015 budget and there remains approximately £60m of funding available for the 2015-2016 financial year.

Company News

2014 was another record breaking year for First Mortgage, completing over 5,300 mortgage transactions which amounted to over £750m in mortgage lending. This extends our position as the top performing mortgage advisors in Scotland and firmly puts us as one of the UK’s leading advisory firms.

We’re excited about our new branch in Kirkcaldy, due to open in February and the feel good factor within the company is clearly evident with further growth in employees along with the opening of a new telephony centre in Glasgow to manage the increased levels of enquiries.

With further expansion on the cards, coupled with our core values and local market knowledge, we’re confident 2015 will be another resounding success!!

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