MORTGAGE RATES LOWEST SINCE 2003

…… so says research by Moneyfacts. This is despite our greedy banks still refusing to pass on the benefits of a .5% Base Rate operational for the last 27 months.

Last winter, forecasts of Base Rate increases soon were pessimistic, and general opinion is that whilst there may be a marginal increase this year, low rates will be with us well into 2012. Of 22 economists surveyed by the BBC, roughly half expected an increase in August this year, but most felt the hit was more likely to come in the second half of next year. UK residents can currently obtain Base Rate trackers as low as 1.95% and two year fixes at 2.75% - if they only want to borrow up to 60/70% of value. Rates are still ridiculously expensive for those needing loans in excess of 80% and there are very few deals at all in the marketplace for 90/95% loans

Expatriates, who are still looked on as high risk borrowers bordering on the sub prime, still have to think in terms of family occupation rates in the mid 3%’s. However for expatriates letting, perversely they can actually achieve better terms than their UK counterparts. This is demonstrated in our comparative table. Regrettably the mortgage market is perverse and illogical, and while it is run by bean counters reliant on computer scoring, the merits of lending to the far stronger financially placed expatriate, will remain a limited market place. Our website gives comparisons of rates and terms for a selected panel of lenders. There are some new boys making some impact, but their terms have yet to be so attractive to be included in our listings.

CURRENCY MORTGAGES – A CURSE ON YOUR HOUSE!

We hear again cries of anguish from borrowers of lenders such as Lloyds and RBS as a result of margin calls. Exchange rate fluctuations have been very marked and borrowers are now being requested to stump up capital to cover the currency risk side of their loans. An extreme report in The Times recently highlighted the predicament of many UK investors enticed by developers into purchasing with Swiss Franc mortgages. In July 2007, £1 equalled 2.49SwFr. Now the SwFr is at 1.35 to the £. A particular quoted case involved a purchase made in June 2007 with a loan of 238,000SwFr. Exactly four years on the borrower owes nearly £15,000 more if converting back to his home currency. That would be in the unlikely event of a remortgage being available. Additionally this borrower has made repayments of more than £50,000 since he took out his loan. A salutary and miserable tale! Even when established in 1988 in Hong Kong, IMP have always given currency loans a wide berth. Yes, you hear of those clever enough to have made such plans profitable, but for every one success story there are several from those who say they wish they had never got involved. Unless you are very financially literate and something of an expert in currencies, then stick to the currency which matches the property asset, the property income and not least your ‘mind set’.

HOUSE PRICE INDICES A FARCE

‘House prices up £67 in a day’ screamed the Daily Express front page headline on 7th July. Their justification for this was the monthly report from Halifax giving a 1.2% increase in typical(!) house prices during May. Perhaps this was the Express’s attempt to kick start the UK housing market? Any day now the Nationwide Building Society will produce their meaningless statistics. Halifax’s April figure gave a 1.4% drop, whereas Nationwide registered 0.2%. Neither source gives a meaningful measure of what is happening in the real world. Both lenders base their indices from samples of mortgage offers made. Rightmove who make a better stab at things produce figures based on asking prices and Hometrack work on a survey of 5,000 estate agents.

Serious findings are available via the Land Registry data which is based on actual sale prices achieved. They show that to average UK house price inflation or deflation is farcical! For the three months to June, the Land Registry recorded a year on year increase on all property types outside Greater London of 4.2%. Surrey was broadly in line with that at 5.1%, but West Berkshire properties recorded a leap of 14.5%. Contrast that with Gwent down 18.6% and Hull and Middlesborough down 4.6% and 8.4% respectively. The divide between London and the Home Counties is growing at a more and more disturbing rate.

London should be excluded from any attempts to index prices. An average of all London boroughs showed a 10% increase in the preceding year. This included gains in Southwark of 23%, Kensington & Chelsea 13% and further out in Richmond 11%. This related to flats and maisonettes. The average price for a semi in Kensington & Chelsea was in excess of £4m. but you could get one in Barking for £200,000K House prices have declined in every region except London and the South East over a one or three year period. Around one third of properties in the UK are bought by cash buyers, and In London that figure is closer to 70%. Most of the cash buyers are foreign nationals seeking a safe haven for their money. It is thought that Spanish investors and people from Uzbekistan were amongst the most prolific new London purchasers. They are followed by the perennial London Investors the Hong Kongers.

At IMP we do believe that the corner has been turned. Our beastly banks are reducing their rates having suckered so many into unnecessarily high fixes over the Autumn, Winter and Spring via dire threats of higher Base Rates in the immediate offing. There are signs of economic improvement and generally the UK seems to be in better shape than most of its European neighbours. Spring 2012 might well be welcome as long as there are no further major crises in the Middle East or indeed elsewhere.

We continue to try and source new sources of funding for what we consider to be the ‘holy grail’ of mortgage lending! We can give ample proof of the quality of the borrowers we have introduced to lenders over the last 23 years. Unfortunately, nowadays the computer rules, and unless an expatriate has a very strong current or recent UK financial background they, and we, are likely to be confounded by the box tickers! Thankfully we have made good friends in the lending industry who do value our introductions and hence we are able to offer exclusive and semi exclusives unavailable direct or via other intermediaries. Call, fax or email us for the latest availability.


ADRIAN WRIGHT
International Mortgage Plans

Website: www.International-mortgage-plans.com
Email: info@international-mortgage-plans.com

Tel: 01932 830660
Fax: 01932 829603
 

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