Check out our friends at ESPC and their mortgage predictions for 2018
Making predictions for the coming year is a difficult task and no one has a crystal ball. However, general indications are that activity in the property market and mortgages should continue to carry on from 2017. The hope would be that the market will become more balanced for both buyers and sellers. There is no doubt in 2017 that it was a seller’s market due to a lack of stock available. Plenty of willing buyers meant that competition was aggressive and selling prices regularly achieved 10 to 15% over the Home Report valuation.
Hope for 2018
Hopefully, people will see properties moving quickly and more confidence will return for people to sell their own properties and even out the market. Other helpful market conditions which support a positive market are interest rates still being very low, meaning potential payments for borrowers are more readily affordable.
We have had one rate rise recently and it is forecasted there is likely to be at least one other at some stage of 2018. But we are still in spoilt times for borrowers and any increases are likely to be slow and incremental which should give prospective buyers peace of mind. Mortgage lenders also now have greater confidence and they are clearly showing a bigger appetite to lend money which is providing fiercer competition. This can only be good for borrowers.
There are more mortgage products now available, and usually only require a 5% deposit. This means that more people can find a mortgage, while also being able to keep an affordable budget. This should be the motivation particularly for first time buyers, who are perhaps renting at present and in essence paying someone else’s mortgage.
The main obstacle for many clients with smaller deposits has been the common theme of properties going well over the valuation- sometimes 10 to 15%. Mortgage lending is based on the purchase price or Home Report valuation, whichever is the lower figure, which means that any price paid over the value cannot be used as part of the deposit for mortgage purposes. This therefore makes the deposit amount needed typically higher than the advised 5%.
Finally, it would be remiss not to mention the fact that Brexit is looming ever larger on the horizon. Negotiations over the UK’s departure from the EU will start to dominate headlines as the year progresses, and details of these negotiations will become more crystallised. Depending on how talks progress, we could see a negative impact on market sentiment and this could also serve to cool demand as we head into the second half of the year. But the positive news is that the Edinburgh market seems more robust and equipped for this than any other part of the country.
To summarise, we at ESPC remain optimistic for 2018. The mortgage market is fiercely competitive and there are some great deals to be had. The ESPC Mortgages team looks forward to this continuing throughout 2018. We look forward to another record of mortgage approvals and, of course, helping more and more people get their dream property.
As independent mortgage advisers, ESPC Mortgages can help with all aspects of understanding your budget, applying for a mortgage and dealing with the relevant insurance requirements.
Give us a call on 0131 253 2920 for more advice.
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The information contained in this article is provided in good faith. Whilst every care has been taken in the preparation of the information, no responsibility is accepted for any errors which, despite our precautions, it may contain.
The initial consultation with an adviser is free and without obligation. Thereafter, ESPC Mortgages charges for mortgage advice are usually £350 (£295 for first time buyers). YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOANS SECURED AGAINST IT. Get in touch with ESPC Mortgages here.