News

Large family homes increase in value by £91 per day

Detached family homes have risen in value by 13 per cent over the past year, according to Halifax. This compares with a 8 per cent rise across all types of housing. The average price rose from £266,060 in the second quarter of 2009 to £299,295 in the second quarter of this year.

Melanie Bien, director of Private Finance, says: 'Those who are moving up the housing ladder and buying a sizable family home tend to be in the fortunate position of benefiting from a decade or so of home ownership. While the majority are not exactly cash buyers, they often have significant savings to inject into the purchase so are less reliant on mortgage finance. They qualify for the cheapest mortgage rates and are more attractive to lenders than first-time buyers with little or no deposit.

'There is plenty of demand for detached family homes with lots of space as a result, which helps push up prices, and these properties tend to hold their value better in a downturn.

'Even if you require a relatively modest loan-to-value on your mortgage, it is important to seek independent financial advice. A broker with good private bank contacts will be able to steer you in the right direction and ensure you have the best chance of obtaining mortgage finance on competitive and potentially bespoke terms.'

If you are interested in chatting through the options with an experienced independent mortgage broker, please contact Private Finance on 0800 980 8777.

Borrowers warned over loyalty mortgage rates

Barclays is the latest high-street bank to offer preferential mortage rates to its current account customers. From 1 September, the bank will reduce fixed, tracker and offset rates by up to 0.54 percentage points for customers who have a current account with the lender and have paid in at least £800 in each of the three months before making a mortgage application. 

Barclays follows Halifax, HSBC, NatWest and Abbey in offering cheaper mortgage rates to current account customers.

Melanie Bien, director at Private Finance, comments: ‘A discount of up to 0.54 percentage points is not to be sniffed at and means customers can access some pretty competitive rates, with a two-year tracker starting at 2.79 per cent, for example. But while a discount will be welcome, it's important that customers still compare what their bank is offering with what is available elsewhere. You should not assume that loyalty means you will automatically receive the best rate on the market, nor necessarily the right mortgage for your circumstances.

'This growing trend underlines the value lenders are putting on cross-selling. They would love customers to return to the days when they had several products with the same bank.

'Borrowers should always check with their existing bank as a matter of course what it is offering when taking out a new mortgage or remortgaging. Armed with that knowledge, they should then research what else is on the market and seek independent mortgage advice to ensure they aren't paying over the odds for what is likely to be their biggest outgoing.'

For independent mortgage advice, please contact Private Finance on 0800 980 8777.

Number of first-time buyers falls

The number of people buying their first home has dramatically fallen over the past 12 months, according to new findings from property website Rightmove. It said that only 22 per cent of potential buyers were considering buying their first home next year, compared with 31 per cent in 2009, and half the level required for a healthy housing market.

The Council of Mortgage Lenders added that 80 per cent of first-time buyers under 30 need assistance from their parents, with the average age of the unassisted first-time buyer rising from 33 to 37 in the past five years.

Melanie Bien, director of Private Finance, says: 'With lenders requiring at least a ten per cent deposit to get a mortgage, it is no real surprise that first-time buyers are struggling. Without significant financial assistance from their parents, it is proving impossible for many to get on the housing ladder. Home ownership is now a reality only once you hit your thirties if you don't have help from the Bank of Mum and Dad.

'This has repercussions for the housing market as a whole as first-time buyers are the lifeblood of that market. Many of those homeowners further up the chain have no hope of selling and moving on if there isn't a first-time buyer at the bottom of it. Many chains are collapsing as first-time buyers struggle to get the mortgage finance they need.

'Parents who are keen to help their children buy their first home should seek advice from an independent mortgage broker who will be able to discuss the options available.'

For more details, please contact Private Finance on 0800 980 8777.