In its strongest start to the year since the nadir of the credit crunch, the UK mortgage market seems to be showing signs of life. In its latest monthly set of data, the Council of Mortgage Lenders – whose members represent 95% of retail mortgaging lending in the UK – said gross mortgage lending was £15.5bn in January, a 33% increase on the previous year’s figure. They said monthly approvals for home purchase averaged 70,000 for the final three months of 2013, the strongest figure for six years.
Assistance schemes like the Government’s Help to Buy programme have been thanked in part for the surge in activity and some believe the strong gross figures suggest the UK housing market’s health is improving. With an improving economic backdrop, falling unemployment, better consumer confidence and still-low interest rates, all the factors are in place for a healthy housing sector.
There are many mortgage options and the right one for you will depend upon your personal circumstances. A mortgage adviser can talk you through the pros and cons of fixed rate, variable or discounted mortgage. Whether regular payments and the ability to budget more accurately is important, or the flexibility of paying off chunks and reducing your overall interest rate if this were an option, they’ll be able to point you in the right direction.
At today’s low interest rates, fixed rates are a great choice for some – especially if you think that interest rates are likely to rise over the coming months and years. If you can’t opt for a fixed rate right now, perhaps a tracker would be more appropriate, with the added bonus of the option to repay or exit early, if your financial situation changes.
Don’t forget, it’s not just the repayments you need to consider, but the cost of any arrangement, booking or valuation fees to show a truly like-for-like comparison. Also, consider any early repayment charges or exit fees. The mortgage world is changing quite rapidly and new arrangements are continually coming to market. Speak to a mortgage adviser about your circumstances -whether you’re after a re-mortgage, a second home or taking the first step onto the housing ladder, they’ll be best placed to find you the most appropriate deal.
Buy to Let mortgages are not regulated by the Financial Conduct Authority.