14/07/2007 by Damian.

Affordability issues have and still do contribute to the strong home rental conditions that we are seeing are the moment.

According to the latest figures released by the National Association of Estate Agents, demand for rental property continues.  The increase in Eastern European immigration, good employement conditions and the demand from those who cannot afford to buy ther first home has contributed to a thrivingrental market during Quarter 1 of 2007.

Despite the increase in in the number of buy-to-let investors and properties available, landlords have been very succesful in achieving the desired rental yields.

With affordability still a major issue for first time home buyers looking to get onto the property market, many professionals are being forced to stay in rented accomodation for longer and are now starting to pay higher premiums in order to enjoy better standards of living.

Chargeable rents rose in the first quarter of 2007, up an average 1.77%.  However, the interest rates rises in November 06 and January 07 are likely to have had an effect on the rental value as landlords increase their rent to cover additional outgoings.

Posted in First time buyers, General | Print | 1 Comment »

14/07/2007 by Damian.

As Less2sell Online estate agents have reported previously, interest rates are on the rise.  The Bank of England have increased the interest rate 5 times (see our historical interest rate page for actual increases) since August 2006 to try and controll the UK inflation.

 So, does it make sense to avoid the pain of future rate rises by locking yourself into a fixed-rate mortgage now? This question is extremely difficult for Less2sell Onlline Estate Agents to answer, because it depends on your own view on the future direction of interest rates, your personal attitude to risk, how affordable your monthly repayments will be, and so on.

If you are comfortable with knowing how much you mortgage is going to cost you per month for a pre-arranged period, then a fixed mortgage should be right up your street. However, if you think that interest rates are near their peak (some analysts think that 6% is the peak) and will come down over the next year, then a variable-rate deal may be a better bet.

I recently came across an article writen by Cliff D’Arcy of www.fool.co.uk who in order to gain some insight into the ‘fixed versus tracker’ debate decided to investigate the actions of its own users.

Each month, thousands of people apply for home loans via the Fool’s award-winning, no-fee, whole-of-market mortgage service.  The outcome from the investigation was as follows:-

• More than two out of three people (68%) took out a fixed rate; and
• Of the remainder (just under a third of the total), 31% took out tracker mortgages, with the remaining 1% taking out other variable-rate home loans, such as discounted variable, capped and low standard variable rates.
• Of the people who took out fixed-rate home loans, they found that:
• Over seven in ten (71%) took out a two-year fix;
• Nearly one in five (19%) opted for a five-year fix;
• One in fourteen (7%) went for three years;
• One in fifty (2%) pushed their fix out to a decade; and
• The remaining 1% took out fixed rates lasting for between one and 25 years.

So, the conclusion is that if you’re one of those people who feel comfortable following the herd, then two- or three-year fixed-rate home loans seem to be the flavour of the day. However, if you are a risk taker and want to gamble on interest rates coming down (as I am!) then a tracker mortgage might be preferable.

Which ever option you choose remeber that your home may be repossessed if you do not keep up with repayments.

Related Links

UK Interest Rate Rises by 0.25%

Beginners Guide to Predicting the Outlook for the Housing Market

UK Housing Market Shows Signs of Slowing Down

Mortgage Bills Set to Increase for 2.8 Million Borrowers.

UK Top Lenders Remove Fixed Rate Deals

Historical Interest Rate Decisions

Posted in UK Interest rates | Print | No Comments »