With the general election creeping ever closer, the financial press were keen to examine the various initiatives offered by the 3 main parties this weekend. The Observer looked at various policies, such as Labour’s promise to target lending via Lloyds and RBS, as well as building another 10,000 affordable homes. The Conservatives plan to set up new local housing trusts and abolish Home Information Packs, while the Lib Dems aim to build more homes to rent, and create ‘safe start’ mortgages which will protect against negative equity. The Sunday Times reported on the cost of mortgage funding, which is expected to rise if there is a hung parliament, and experts suggested borrowers may want to take a fixed rate now with the option to switch to a tracker mortgage if the Conservatives win and interest rates stay low. House buying season is also upon us, and the Financial Times discussed rate cuts from lenders such as Nationwide, Woolwich and the Post Office. The cost of longer term rates has also reduced, suiting those who don’t wish to remortgage every 2 years, or who want longer stability during these uncertain times. The Sunday Times revealed however that a recent increase in purchase enquiries prompted by changes to stamp duty has so far failed to translate into sales, with experts blaming lack of available finance and a tightening of criteria. Elsewhere, the Sunday Express looked at Equity Release, reporting that 4 out of 5 over-55’s own their own home and have on average £226,000 of equity – something which experts refer to as an ‘untapped resource’. The Times were more cautionary, revealing that around 4000 of the 300,000 borrowers facing an endowment shortfall are turning to these plans to clear their mortgage. Experts urged people to talk to their mortgage lender first to find out if an alternative solution is available, saying that Equity Release can be expensive and inflexible.
What the papers say- 10th and 11th April 2010