0333 772 0672 info@easystreet.co.uk

Where have all the movers gone?

Before the recession, there were about 1.6 million home sales a year in the UK, which plummeted to 860,000 in 2009 but has since recovered to around 1.2 million. New research published by the Council of Mortgage Lenders (CML) suggests that the shortfall is largely the result of ‘missing movers’ – mortgaged home-owners not moving up the housing ladder. The CML commissioned researchers Neal Hudson and Brian Green to explore the phenomenon. They suggest that ‘missing movers’ account for about 320,000 of the annual housing transaction shortfall. They point to a number of reasons for the decline, including the fact that there are now fewer mortgaged owners, and they tend to be older and so naturally less likely to move. However, there are still around 140,000 missing moves that can be attributed to a decline in the rates of moving among mortgaged home-owners. Three factors determine the moving rate among this groups – their desire to move, sufficient funds, and the availability of a home they want to buy. Of these three factors, the research suggests that the availability of sufficient funds – specifically, sufficient equity – is the dominant factor holding back the mortgaged mover rate. The researchers observe that, in many ways, it is not the present but the past that is extraordinary. For five decades the market underwent changes that provided an enormous boost to the ability of people to buy and to own their homes. But expecting a return to those conditions is unrealistic, they... read more

Close to the boom

The number of first-time buyers (FTBs) reached an estimated 162,704 in the first six months of 2017, only 15% below the peak of the last boom in 2006 (190,900), according to the latest Halifax First Time Buyer Review. Although the growth in FTBs slowed to just 3%, compared to an increase of 10% last year, the number of homeowners getting on to the property ladder for the first time is up from 154,200 in the same period in 2016 and more than double the market low in the first half of 2009 (72,700). A decade ago, just over a third (36%) of all house purchases financed by a mortgage were made by first-time buyers. In 2017, this proportion is estimated to have risen to almost half (47%), with the share growing from 44% since the launch of the Help to Buy scheme in April 2013. Whilst the home mover (current owner occupier) market has slowed, housing activity has been dependent on buyers taking the first step on the ladder. In the first half of 2017, the average house price paid by first-time buyers was £207,693 – the highest on record. In the past year the average value of a typical first-time buyer home has grown by 4% from £199,414. And in the past five years, the average price has grown by 50% from £138,663 to £207,693 (an increase of 50% or £69,025), comfortably outperforming price growth across the entire market... read more

How much?

Basic household bills have increased by an average of 43 per cent in the last decade – more than double the rate of wage growth, new research from Santander shows. Analysis of government data also reveals that bills for Council Tax, TV, phone, broadband, gas, water and electricity have, on average, increased 10 percentage points more than inflation over the past 10 years. Gas and electricity are the biggest drivers of price increases, rising 73 per cent and 72 per cent respectively in the last decade, while water bills have increased by 41 per cent – all significantly higher than inflation at 32 per cent. Council Tax has risen by 27 per cent and TV, phone and broadband prices have all risen by 24 per cent, albeit slower than inflation but still faster than wage growth (19 per cent). Household bills continue to squeeze incomes as an eighth (13 per cent) of the average UK adult’s salary is spent paying basic domestic bills. Over the course of a lifetime, people will fork out an average £524,464 on bills, with those in London set to spend the most (£601,638), closely followed by people in the South East (£580,566). However, it’s those living in the South West who will spend the largest proportion of their salary on basic household bills – with almost a sixth (15 per cent) of their earnings going towards them over the course of a... read more

Later Life

The current framework for delivering guidance and advice to those seeking to borrow money against their property as they approach and enter retirement operates largely in two distinct silos according to research published by the Council of Mortgage Lenders (CML). It is split between lenders and intermediaries who lend and provide information and advice on residential mortgages, and those who lend and provide information and advice on equity release products (mainly lifetime mortgages). The report suggests the two markets have very different attitudes towards borrowing in later life. Residential mortgage lenders have traditionally viewed borrowing as a means to accumulate equity and a retirement free of debt. The lifetime mortgage lenders see borrowing in later life as a means to help customers extract value from the accumulated equity. The CML highlight how advising older borrowers can be time-consuming and expensive and those needing the loan who may need to move between the two markets or may wish to weigh up the advantages and disadvantages of each market find there is no single obvious place to go and no joined up framework for addressing their needs. In addition, the report suggests consumers are maybe frustrated at barriers to borrowing, some of which can seem to them unfair. They also perceive that the products available do not fully meet their needs and that products can be difficult to compare and... read more

House Price “Re-bound”

According to the latest statistics released by the Nationwide Building Society, UK house prices rebounded in June, with prices rising by 1.1% during the month, erasing the decline recorded over the previous three months. However, monthly growth rates can be volatile, even after accounting for seasonal effects. The annual rate of house price growth, which the Lender states gives a better sense of the underlying trend, continues to point to modest price gains. Annual house price growth edged up to 3.1% from 2.1% in May. In effect, after two sluggish months, annual price growth has returned to the 3-6% range that had been prevailing since early 2015. Nationwide highlighted a shift in regional house price trends. Price growth in the South of England has moderated, converging with the rates prevailing in the rest of the country. In Q2 the gap between the strongest performing region (East Anglia, which saw 5% annual growth) and the weakest (the North, with 1% growth) was the smallest on record, based on data going back to 1974. Nevertheless, when viewed in levels, the price gap between regions remains extremely wide. London saw a particularly marked slowdown, with annual price growth moderating to just 1.2% – the second slowest pace of the 13 UK regions and the weakest pace of growth in the capital since... read more

Would You Want A Mortgage In Your 90’s?

Most mortgage borrowers aim to make sure their home loan is paid off by the time they retire. The idea of repaying a mortgage without the regular income that a salary brings is not an attractive option for many. Banks, as a rule, tend to be wary of offering mortgages to older borrowers, knowing that there is less time in terms of prime earning years for the mortgage to be repaid in. However, there are some lenders who now offer mortgages to older borrowers and whilst few people actively plan to pay a mortgage at the end of their lives, for some it is a new financial reality. Getting a Mortgage While on a Pension Following the financial crisis of 2008 and the ensuing property slump, the government became very particular about enforcing responsible lending. The kind of borrowing that was possible during the decade of ‘cheap money’ from 1997 onwards had resulted in many borrowers being over committed, in negative equity and facing repossession of their homes. Lending from 2014 became even more stringent, as banks and building societies were required to conduct thorough audits of prospective borrowers’ financial means, in order to vet their suitability for borrowing. It is of course unlawful to discriminate against a borrower on the grounds of age, just as it would be to discriminate in any other way; banks cannot refuse to lend because the borrower is too old. However, older lenders looking for low cost mortgages are often declined based purely on repayment criteria. If a lender believes that once a borrower retires their earning potential will decline, a loan is... read more

Raise Money: Downsize To A Smaller Property

Your current home may well be the place where some of your happiest memories were created. Realistically, however, downsizing may be an excellent way of financing many more. Here is a quick guide to some key questions on the topic. Why should I downsize my home? Home may be where the heart is, but property has a financial value. There are various equity release schemes, which make it possible to release equity in property while you continue to live in it. These each have their advantages and disadvantages and you would need to do your research thoroughly to decide if one of them was right for you. Equity release can affect eligibility for state benefits and grants, and may work out more expensive than other alternatives such as downsizing. Downsizing simply means moving from a more expensive property to a more affordable one. This may be a smaller property and/or one in a different area. This turns home equity into cash, which can be used for other purposes. For example it can be used to help your children get on the property ladder themselves. AN EQUITY RELEASE PRODUCT WILL REDUCE THE VALUE OF YOUR ESTATE, WILL NOT BE SUITABLE FOR EVERYONE AND MAY AFFECT YOUR ENTITLEMENT TO STATE BENEFITS. TO UNDERSTAND THE FEATURES AND RISKS PLEASE ASK FOR A PERSONALISED ILLUSTRATION. Please check that this mortgage will meet your needs if you want to move or sell your home or you want your family to inherit it.  If you are in any doubt, seek independent advice  The practicalities of downsizing Downsizing is essentially selling a home and buying another... read more

Flood Risk – Check Your Insurance

One of the grim inevitabilities of the winter months in Britain is the prevalence of flooding. Britain has experienced several years of above average rainfall that many scientists attribute to climate change. In 2007, for example, the country was 20 percent wetter during the winter than any other year since records began in 1879. Some studies have suggested that flooding is in part due to the development of towns, cities and farmland, preventing natural drainage from taking place. Are you ready for the rain? This article is a quick guide to the likely risks of flooding and the steps that you can take to make your home safe from the high waters, or insured against them. Waterlogged postcodes Towns like Boscastle in Cornwall that was virtually swept away by flooding in 2004, or Hebden Bridge in 2012, are reminders to Britain and to the insurance industry, that some areas pose higher risks of flooding than others. Insurers pay a great deal of attention to scientific information on flooding and calculate insurance premiums accordingly. As risks change, so the insurance industry devises new products to insure against them. There are two types of flood risk insurance: buildings flood insurance that covers structural damage to your home, and home contents flood insurance that covers your belongings and furnishings. If you have standard buildings and home contents insurance but you live in a high risk flooding area, you will need to change your policies to specific flood risk cover. If you don’t have flood insurance and your home is damaged by flooding, there is a chance that your insurer will not pay... read more

Is Life Insurance Still An Asset For The 50+?

Most people start families in their 20s or 30s and this is also the first time they think about family protection, life insurance and making sure that their loved ones are taken care of if they die. Once this life cover is purchased, it is common to forget all about it and only review it every couple of years when a review of ones finances is due. Decades later, when your circumstances have changed and your family has grown up, it might be tempting to question whether a life insurance policy is necessary at all. However, cancelling a policy might involve hidden costs. This blog post is a quick guide to the possible pitfalls of cancelling your policy. Changing Circumstances If your children are over the age of 18 or a substantial part of the mortgage is paid off, there might be little reason to keep your policy. It seems rather obvious to say, but if you cancel your policy the first thing you will lose is the cover it offers. If you need to take out a future policy for any reason, you will find it far more expensive in terms of monthly payments than the original agreement. Some policies are designed to pay for the cost of schooling and university education of children if a parent dies, but this might seem redundant if your children are now grown up and have left home. You might also find that you still need a life insurance policy as grandchildren could become dependents and the financial future of your partner might be in jeopardy if you pass away. It might... read more

Should We Be Ditching Cash?

Apple Pay has now arrived in the UK. Paypal has now outgrown eBay. Visa Europe is said to be in talks to be bought back by its larger sibling Visa Inc. In short, digital payment systems are big business in every sense of the phrase. Notwithstanding this, cash is still very much a part of life around the world. Is it, however, headed the way of the penny farthing bicycle? Certainly there has been a push against cash in recent times. A UK MP has already suggested paying benefits on restricted-use payment cards. The Danish government is considering allowing retailers to refuse to accept cash for payment. Meanwhile the French government has lowered the amount vendors are legally allowed to accept in cash for any single transaction. Let’s look at three areas which concern us all and see where cash stands against digital payment methods. Everyday Purchases From morning coffee to supermarket shopping and paying utility bills, there are all sorts of everyday purchases people make time after time. Some of these purchases are now impossible to make with cash. If you get your supermarket shopping online, then you need to pay online. Some of these purchases penalize those who want (or need) to pay with cash. For example, pay-as-you-go utilities are notoriously more expensive than other tariffs. Of course, there are still plenty of purchases where it is possible to pay with cash. In fact in the face-to-face environment, there are some places which essentially penalize people for paying by other means. Some retailers (generally smaller ones) put surcharges or other fees on card payments. Others insist on... read more
Check Our FeedVisit Us On TwitterVisit Us On Linkedin