Friday, 30 January 2015

This week the government published details of the implementation of the European Mortgage Credit Directive into the UK market. Although the government has made significant changes to the mortgage market already, there are some other changes to come. They are to be implemented by March 2016 however they are been put into place now in order to give the market as long as possible to prepare for them.

The first change is in the buy-to-let sector. Currently this area of mortgage lending is mostly unregulated because landlords are typically viewed as business borrowers therefore requiring less supervision. However the new legislation means that so called ‘accidental landlords’ will be subject to the affordability assessments as seen in the residential market. An example of an accidental landlord is someone who may have purchased a property with a mainstream mortgage, but due to a change in circumstances, they move away but decide to keep the property as an investment.

The second area is for the Financial Conduct Authority (FCA) to bring the regulation of  second charge mortgage lending more in line with first charge mortgages. The FCA believes that there may be a risk to consumers in this area from poor sales practices and ineffective affordability assessments.

We welcome the implementation of stricter affordability rules in order to help protect the consumer from poor sales practices as well as ensure that they can afford to pay back the loan. It will be interesting to see how this impacts current lending levels as it will be difficult to identify and evidence a professional landlord from an ‘accidental’ one.


Monday, 12 January 2015

For a while now we have heard in the news how competitive mortgage products are and this week we saw a glimpse of this in the longer term products. We saw the first 10 year fixed rate fall below 3% and it is possible that we could see others follow suit.

Given the uncertainty that lies ahead regarding interest rates it may not be a bad idea to secure a longer term product while the rates are at such attractive levels. When the interest rate is increased, which many economists are predicting will be later this year, it is unlikely we will see rates of this level for quite some time.

It is encouraging to hear that a new lender has entered the market. This sends out a positive signal in regards to the strength of the industry and offers even more competition to the market. There are also other lenders who are looking to open up their products to intermediaries this year.

For any advice on long term mortgage products please contact us on 01977 674455 or send a message via our website

Your home may be repossessed if you do not keep up repayments on your mortgage

A fee will be payable of £995 for mortgages up to £500,000, £1,500 for mortgages between £500,001 and £1,000,000 and £1,500 for mortgages over £2,000.