The Daily Express reported today on recent research by the Post Office, which revealed that at least 3 million borrowers in the UK do not know what interest rate they are currently paying. Thousands of homeowners assume that Standard Variable Rate is the best deal for them, but with many variable rates now above 4%, experts urged people to review their options and consider a medium term fixed rate to protect against future rate rises. An increasing number of lenders are returning to the Buy-to-Let market, revealed the Daily Mail, with societies such as the Nottingham dropping their interest rates and relaxing their lending criteria. Average loan to value is still around 70-75%, so providing a large enough deposit can be the biggest difficulty, but rates are predicted to fall further as more lenders enter the sector. The Mail also revealed that between now and 2015 an estimated 2 million endowment policies are due to mature, but some companies admit that only 1 in every 100 is currently on target. Anyone with a predicted shortfall is advised to look at change all or part of their mortgage to repayment in order to avoid reliance on their endowment’s performance, or even consider downsizing to a cheaper property. Elsewhere in the Express there was news that banks are being urged to consider income that First Time Buyers can generate from letting out a room when deciding how much they will lend. The general feeling is that it would provide an important boost to the supply of affordable housing by increasing the stock of flat shares.
What the papers say- 3rd March 2010