Welcome to today’s UK property news and views…
According to the Telegraph, ‘mortgage borrowers who want to lock into current low rates are being encouraged to act quickly as recent high rates in the capital markets are likely to drive up mortgage prices.’
It follows news that banks are pushing up interbank borrowing rates – i.e. what they charge each other – and that this will soon see higher rates for mortgage borrowers.
Ray Boulger of John Charcol is quoted as saying that ‘mortgage rates have bottomed out. Fixed rates are on the floor and for most people there is little or nothing to be gained by waiting.’ Time to act?
A new survey by mortgage lender Landlord Centre suggests that would-be buy-to-let investors should look at university towns outside of London. The survey indicates that London yields are 5.7 per cent compared to 6.2 per cent nationwide (although, we should point out, you can generally expect greater growth in London).
The best yields, according to the survey, are in Leeds at 7.6 per cent, Liverpool at 7.4 per cent and Nottingham at 7.0 per cent. ‘While the potential for long-term capital growth is greater in London, you may get a similar monthly income from rent on a much cheaper property outside the capital.’ More to come on HMO investments in university towns soon.
For those looking for confirmation that the property market is moving back up – and that it’s time to buy in sooner rather than later – we note that asking price discounts are falling sharply according to Zoopla.
‘The proportion of properties on the market in the UK today with an asking price that has been reduced at least once has fallen from 37 per cent one year ago to 32 per cent today. And the average discount to the original asking price has come down from 7.6 per cent last August to only 6.3 per cent now.’
‘A fall in the proportion and level of asking price discounts suggests sellers are feeling more confident and happy to wait it out to achieve their target asking price. Banks, sellers and buyers are all more bullish about the state of the economy which bodes well for the months ahead. And the Bank of England’s forward guidance on interest rates has generated a greater sense of certainty about the future, which should lead to even more activity.’