This weekend’s financial press saw the inevitable fall-out from last week’s austerity budget, with experts in the Times warning of the impact that cuts in public spending could have on house prices, particularly in areas of the North which are more dependent on the State for employment. There was positive news for homeowners however, as economists in the Sunday Times predicted a delay in any rise in base rate as a result of the budget. Experts in the Mail on Sunday agreed that there has indeed been some encouraging activity in the mortgage market recently, with improvements in interest rates and Loan to Value Ratios (LTV’s), but also felt that the changes announced by the Chancellor last week could worry some borrowers. With average 2 year fixed rates dropping to their lowest in 7 years, now may be the time for anyone with concerns to grab a low rate and secure their payments for the next few years. The Buy-to-let market is also slowly coming back to life and, as reported in the Telegraph and Financial Times, with higher rate Capital Gains Tax (CGT) at 28% rather than the expected 40%, the argument for property investment is still strong. Mortgage lenders are now introducing more and cheaper products, and with property prices rising experts predicted that more lenders will follow suit. In other news, the Sunday Express warned that plans to allow the Bank of England to cap mortgage lending could prevent more First Time Buyer’s from getting onto the ladder, while the Observer revealed that lenders in Ireland are launching ‘negative equity’ mortgages for homeowners needing to move property.
What the papers say - 26th and 27th June 2010