Mortgage and Property News

Buy To Let

According to Paragon Mortgages, the specialist buy to let mortgage lender, this sector of the market is in good shape as rental yields in May reached the highest point since the start of 2006. The lenders Buy-to-Let Index reported that yields rose to 6.4% last month as rental incomes have risen steadily over the last 12 months as the slowing housing market fuelled strong tenant demand.

In Paragon's Trends survey 74% of the landlords questioned said that an ability to get a good deal on properties encourages them to buy, even in the current climate.

Fixed Rate Mortgages

More statistics published this week showed the average rate for two-year fixed rate mortgage has broken the 7% barrier and stands at 7.02%. Anyone looking to fix their mortgage for five years is also paying the price as the average rate has increased to 6.82%, as lenders pass on the increase in their borrowing costs. While the average rates have increased there are still many deals below this mark, highlighting the importance of researching the whole market for the most suitable deal.

Mortgage Best Buys

Mortgage Lending

The British Bankers Association said this week that just 27,968 loans were made to people wanting to buy a home in May, which was a 56% fall on May 2007, and less than a third of the numbers at the peak. This was due to tighter lending criteria and economic pressure on households according to the BBA’s Statistics Director David Dooks, who added that remortgage business is holding up, and accounted for a record of 53% of all lending, as borrowers take advantage of deals with other lenders.

Moving Home

The Alliance & Leicester estimate that 3.25 million homeowners are looking to move over the next 12 months dispite the recent downturn in the housing market. More than 1 in 3 made improvements specifically to increase the appeal of their home, with a further 1 in 5 planning improvements over the next year. However, the majority of homeowners are still improving their home to make it a nicer place to live and to avoid the expense and upheaval of moving elsewhere. The most popular way for homeowners to add value to their homes is to re decorate, closely followed by improving the outdoor space and carrying out routine maintenance. Homeowners are less willing to make more substantial improvements, with only one in six planning to add an extension and evem fewer planning to make their home more eco friendly. Potential buyers though have other priorities when looking for a new property. Whilst the most important factor for many is the number of bedrooms in the property, this is followed by a well maintained property, which highlights the value of maintaining your home well, whether you are planning to sell now or in the future.

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