The financial press this weekend continued to warn borrowers to move their mortgage ahead of a rise in interest rates. The Times reported on recent research which revealed that 3 million homeowners would struggle to meet their repayments if rates were to rise by as little as 1%, and experts advised against trying to second-guess the market, recommending instead that people should consider how they are equipped to deal with increases in rates. For First Time Buyers looking for a way to get on to the ladder, the Financial Times discussed plans by specialist property company the Mill Group to set up an investment fund that will finance First Time Buyer deals of up to 95% loan to value. Buyers will put down a 5-15% deposit while the fund charges a monthly investment fee to fund the rest. Brokers suggested that the success of the scheme will depend on balancing investor needs without damaging the purchaser. ‘Second-steppers’ – borrowers who bought for the first time a couple of years ago and are hoping to upgrade – got a mention too this weekend, with Thisismoney.com reporting on recent figures produced by Lloyds, showing an average price difference of £48,216 between 1st and 2nd homes. Many felt that this difference in price shows that 2nd time buyers are riding out this period of low prices, which in turn has caused a clog in the market.
What the papers say- 5th and 6th February 2011