So we've just had the UK's first 'heat wave' since 2006, and this seems to have created a beaming ray of sunshine on our mortgage market. Colleagues in the industry I've spoken to in the last few weeks haven't been this busy in years, so what has happened? Has the recovery finally started or is it a flash in the pan?
Well there seem to be a few factors kicking in, rather than one overriding driver. Firstly the weather itself, it's no coincidence that the housing market here traditionally slows down when the nights draw in and picks up in the spring when it's light enough and mild enough to go out after work and view property. This year our spring was so cold nobody wanted to go out, now the cold has ended First Time Buyers are looking as they would normally months earlier.
Government incentives, the extension of help to buy and most significantly the details starting to emerge about January's mortgage guarantee have sparked public debate and interest. It remains to be seen whether this would work for you when George Osborne adds the devil in the detail shortly. Watch this space.
Fixed Rate mortgages are at record lows, with five year deals looking particularly good and selling like hot cakes, these good deals are now available to more people than ever before with some previous 'mortgage prisoners' with 15 or 20% equity now seeing it financially viable for the first time in five years to refinance. Beware though, most pundits believe they have actually 'bottomed out' now, so they won't be available at these levels for much longer.
House prices, in some areas of the country we are now seeing a steady (if subtle) growth in values for the first time since 2006. This, along with improving economic figures has made many more confident in their own employment and financial future whilst at the same time anxious to get on the ladder fearing being priced out as in the past.
Right time? some of my first and second time buyers have been saving for 3 or 4 years and for the reasons above, they feel now is the time to take the plunge.
I'm sure there are yet more reasons, but let's face it, it's good news and long may it continue.
Amidst this recovery a word of caution, unfortunately some lenders have lost their bottle (as my dear old dad would say) and again you may suffer at the hands of nervy surveyors and over officious underwriters (the decision makers), let's hope they acclimatise quickly to help keep things moving in the right direction. A good broker will know how to handle them.
Dean Mason - Cemap, Cert PFS.
Masons Financial Planning