MADNESS , THEY CALL IT MADNESS !
BY CHRISTIAN COVENTRY OF CONCEPT MORTGAGES
Do you think the property market is going to crash ? What do you think is going to happen with property prices ? Are you guys still busy ?
I have been asked all the above daily for well over the last year now and even despite recent interest rate rises , the spike in the cost of living and energy price hikes , we are still buoyant in terms of our levels of activity .
That said , there has been a drop in the number of purchase applications in the second quarter of 2022 compared to our record breaking first quarter .
Interestingly , despite the drop in purchase applications , it ’ s rare that we would see anyone buying for less than asking price and typically most buyers are still having to “ offer over ” to secure a purchase .
Madness , I hear you all shout , they call it madness !
If you look at the fundamentals of purchasing a house versus renting , there is still a compelling argument for many younger buyers to purchase their own home , based on monthly costs at least . I say younger buyer , because a mortgage term would need to be stretched over a longer term to reduce the monthly cost and this would look markedly different for twenty-five-year-old buyer , than say a fifty-year-old , given the age restriction lenders have on a standard residential mortgage .
If we take an example of a 95 % mortgage on a purchase price of £ 175,000 this would require a minimum deposit of £ 8,750 and with typical legal fees and associated survey costs , it would be possible to move forward on a purchase with approximately £ 11,000 in capital .
Using this scenario , you could currently secure a five-year fixed rate payment for under £ 700 , based on a thirty-five-year mortgage term . If you wanted to rent a typical property valued at £ 175,000 then this would likely be £ 875 in the current market , using a 6 per cent yield against purchase price .
I must caveat this of course with the fact that there must be sufficient income to support a loan of this amount and any mortgage would of course be subject to satisfactory underwriting and property valuation . All figures are for illustrative purposes only .
It has been widely reported in the national press , that the UK is set to lose another three hundred and thirty high street banking branches in 2022 .
Many branches have already closed across the Wirral with Barclays announcing that its Heswall branch is to close , following on from the closure of HSBC and NatWest in the Town . Port Sunlight is also to lose its only bank , as NatWest announce the closure of their branch this September .
Banks are directing people to their websites and phone apps , to carry out most their day-to-day banking needs , but this doesn ’ t suit everyone . Even the most financially savvy among us would still like to sit and speak with an expert face-to-face when making a large financial decision and although you can achieve this to an extent with popular video calling apps like Zoom and Teams , it ’ s often not an option with high street banks .
When it comes to deciding on your mortgage requirements the good people of the Wirral need not worry , as Concept Mortgages have high street offices in Heswall and we are more than happy to sit and discuss your requirements face-to-face . We can of course still help via phone or video , and have used secure portal technology since 2010 , but then , as I have said , it ’ s not for everyone .
If you require help with your mortgage requirements you can contact us by phone on 0151 342 3084 , via our website wwwconceptmortgages . co . uk or by dropping into our office on Telegraph Road , Heswall .
Whatever the method you can be sure that Concept Mortgages will always go , one step beyond !
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