So this is the first of our new digital newsletters.…over the last 14 years we have sent physical A4 newsletters in the post to our clients (and a long time ago Christmas cards too!). The idea being that they help you keep abreast of what is going on in the mortgage market, giving you a general understanding of changes in the financial world, it helps us to keep in touch with you on these matters and at the same time keeping you abreast of family updates too (via a separate link here). I have also been known to add the odd cheesy joke into the mix too.
So why move away from postal newsletters? Well whilst I have always enjoyed writing them, the time and monetary cost to produce each one is quite high (imagine Sharon, the girls, my 82 year old mother and myself spending an evening printing labels, folding newsletters, stuffing and stamping envelopes every 6 months or so and that’s after the 2-3 week period it takes for them to be written, printed and delivered!).
My intention isn’t to change the content so much as to minimise the time it takes to produce each one in the hope that I can send them in a more timely manner. With the recent base rate change it would take me close to 2-3 weeks by the time I had written, compiled, printed and posted a newsletter that incorporated the subject, whereas email/web based newsletters can theoretically be produced and sent in a couple of hours. Additionally I tend to end up with the failed intention to write two a year and getting to September and realising I’ve missed the summer one again!
I would be happy to receive any feedback you may feel you can give. My email address is advice@sbms-online.co.uk and further contact details can be found here.
Anyway on to the content. So what has been happening in the financial world?
Bank Base Rate increase
So on the 2nd November 2017 the Monetary Policy Committee at the Bank of England voted 7-2 in favour of increasing the Base Rate from 0.25% to 0.50%. The base rate has held at 0.50% since March 2009 , with the exception of a reduction to 0.25% in August 2016, which has just of course been reversed.
| 06/02/2003 | 3.75% | 05/07/2007 | 5.75% |
| 10/07/2003 | 3.50% | 06/12/2007 | 5.50% |
| 06/11/2003 | 3.75% | 07/02/2008 | 5.25% |
| 05/02/2004 | 4.00% | 10/04/2008 | 5.00% |
| 06/05/2004 | 4.25% | 08/10/2008 | 4.50% |
| 10/06/2004 | 4.50% | 06/11/2008 | 3.00% |
| 05/08/2004 | 4.75% | 04/12/2008 | 2.00% |
| 04/08/2005 | 4.50% | 08/01/2009 | 1.50% |
| 03/08/2006 | 4.75% | 05/02/2009 | 1.00% |
| 09/11/2006 | 5.00% | 05/03/2009 | 0.50% |
| 11/01/2007 | 5.25% | 04/08/2016 | 0.25% |
| 10/05/2007 | 5.50% | 02/11/2017 | 0.50% |
To state the obvious, interest rates have been low for a very long time, anyone who has bought for the first time in the last 8 years has never experienced what our parents may have…for instance the table above shows the Bank Base Rate (BBR) was 5.75% in July 2007, what my table however doesn’t show you is that the BBR in November 1997 was 7.25% and back in October 1989 it was 14.88%!
Now is a great time to fix, rates are dependent on the percentage loan you need but it isn’t hard to obtain a sub 1.80% 5 year fixed rate at the time of writing (and 2 year fixed rates from around 1.29%).
I keep saying it but anyone sat on their hands thinking a variable rate at 3.74% ‘isn’t bad’ should pick up the phone and talk to us. We will shop around (so you don’t have to) and find a lender that will lend whatever your individual circumstance, we will talk you through the options and then fully deal with the new lender so that you don’t have to. Normally of course we do not charge fees either (instead getting paid by the new lender).
Also there was a change to the Stamp Duty payable by first time buyers
Who Benefits?
Individuals purchasing a residential property for the first time within England, Wales and Northern Ireland.
When and What?
From 22 November 2017 first time buyers paying £300,000 or less for a residential property will pay no Stamp Duty Land Tax (SDLT).
First time buyers paying between £300,000 and £500,000 will pay SDLT at 5% on the amount of the purchase price in excess of £300,000, a
reduction of £5,000 compared to the amount of SDLT they would have previously paid.
A first time buyer is defined as an individual or individuals who have never owned an interest in a residential property in the United Kingdom or
anywhere else in the world and who intends to occupy the property as their main residence.
First time buyers purchasing property for more than £500,000 will not be entitled to any relief and will pay SDLT at the normal rates.
The relief must be claimed in an SDLT return.
Don’t call the Bank, call the Browns!
Whilst talking about rates and the options with lenders there is more good news….historically lenders have ignored customers and brokers when it comes to the time when the existing deal ends…some will write directly to the borrower to offer a new deal but generally not giving any advice at all.
All the bigger lenders now have options in place where Brokers can help customers renegotiate the deal with their existing lender and they pay us to do so too (historically this hasn’t been the case and we had to charge some customers a fee).
What this now means is that we can help with the existing lender and shop around elsewhere to get you the best deal without the need to charge you a broker fee as we are getting paid by either the current or new lender on completion of the new deal. I cannot iterate this enough…they are basically paying me to shop around for you, give you full advice and guidance and get you the best, most appropriate deal.
And of course we know you better than they ever could so you can be assured the scheme you end up on is the best given your situation (and cost you nothing to obtain, also with us doing all the leg work and paperwork for you!).
So if you are not clear…we are whole of market mortgage and protection advisers….
- If you are moving home – call the Brown’s
- If you are moving home and tied into a deal with your current lender – call the Brown’s
- If your deal is coming to an end in the next 3/4 months and you are not moving home – call the Brown’s
- If you are looking to raise extra funds to repay debts or carry out home improvements – call the Brown’s
- If you want to weigh up your options as far as moving or staying put – call the Brown’s
- And of course, if you want to look at protection i.e. Buildings/Content, Life, Critical Illness, Income protection or Accident/Sickness/Unemployment cover – you guessed it…call the Brown’s!!
You can get in touch with us via:
- Beds/Bucks 01525 877650
- Herts: 01442 252040
- Mobile 07710 770969
- email advice@sbms-online.co.uk
Thanks for reading, Stuart
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up the repayments on your mortgage.
