Expats looking at rate hike!

The Bank of England has hinted that it could raise interest rates for the first time in a decade to curb inflation, with economists predicting a hike could come as soon as November this year.

In the minutes of its latest Monetary Policy Committee meeting, the Bank said: “A majority of MPC members judge that, if the economy continues to follow a path consistent with the prospect of a continued erosion of slack and a gradual rise in underlying inflationary pressure then some withdrawal of monetary stimulus is likely to be appropriate over the coming months to return inflation sustainably to target”.

Members of the MPC voted by a majority of 7-2 to maintain interest rates at 0.25%.
However, the Bank said that the decision to raise rates would not only depend on inflation but also on the continued strength of the economy. Today’s decision comes after the Office for National Statistics revealed that that inflation rose by 2.9% in August, up from 2.6% in July – equalling the four-year high hit in May this year.

In August, the MPC forecast two rate hikes over the next three years, with the first not until the third quarter of 2018. Today’s announcement suggests there could be a hike far sooner than this.

This all means for the expat mortgagee that interest rates are very likely to increase sooner rather than later. So, very good advice would be to review your current mortgage deal to ensure it is right for your long-term future.

Review assistance

If you would like to talk to an adviser about your current mortgage or indeed require a new mortgage please make contact and we will be happy to help.

Property values rise again – still a great investment.

House prices are 3.4% higher than they were a year ago, according to the latest figures just released. The annual growth rate in the three months to August was higher than the 2.7% annual growth recorded in July.

The average UK house price is now £222,000 after property values climbed 1.3% between July and August. But house price growth is down from its peak of 10% recorded in March 2016. When you consider all that has happened in the last two years it is little wonder. For the expat investor, the reduced growth still represents good value as general savings accounts offer very little return on your money.

Prices were boosted last year amid a flurry of transactions ahead of the introduction of new stamp duty and tax changes to buy-to-let and second homes. While unemployment is at a 42-year low, experts say growth is being held back by low wage growth and rising inflation, which is putting pressure on household finances.

Expats are still flocking to buy in the UK with mortgage transaction numbers at their highest level since March 2016.

The lack of supply of homes for sale has constrained market activity and helped maintain prices. Stock levels on estate agents’ books are near an all-time low and new instructions have fallen for the 17th month in a row. Experts say house prices should continue to be supported by low mortgage rates and a continuing shortage of properties over the coming months. However, some experts are warning interest rates could start to increase at the turn of the year.

Expat mortgages.

If you are looking for a new or re-mortgage please do make contact and one of our fully qualified advisers will be happy to help.

Expat mortgage market changing

The mortgage market in Britain is experiencing a notable change as the reasons why expats re-mortgage evolves. Expat UK home owners are moving away from short term deals and variable rates onto five-year fixes at low rates in moves to guarantee certainty and financial security, according to the latest reports.

Just 18% of expat owners re-mortgaged to lower their monthly repayments in July compared to 21% in June. 15% re-mortgaged to increase the size of their overall loan in July, a fall from 19% in June.

The analysis suggests that instead of re-mortgaging to lower monthly repayments or borrow extra money, home owners appear to be nervous about interest rates increasing and re-mortgaged onto long term deals for certainty and financial security. Just 2% of re-mortgagors predict interest rates to fall in the next year, with the remaining 98% expecting rates to either stay the same or rise.

Over a third, some 37% fixed onto a longer-term deal in July, the greatest since numbers were first tracked, and a significant increase from 7% who previously had a fixed five-year product.

This is a meaningful change in expat behaviour when re-mortgaging. Typically, over the last year, people were re-mortgaging to save on their monthly repayments or borrow additional funds. Instead, with rates low and expectations of a rate rise high, expats are fixing for longer for added financial security.

Expats it would seem are taking shelter from future rate rises and preparing for potentially turbulent times to come. The way people borrow is changing, there is a significant decline in interest-only and variable rate deals, and fixing for longer appears to be the top priority.

Can we help?

If you are looking for a new or re-mortgage please do make contact and one of our qualified advisers will be happy to assist.


Brexit, what Brexit?

The UK housing market is shrugging off concerns in the wider economy following the Brexit vote, compounding problems for many first-time buyers still wrestling with the strongest year-on-year price rises in the market.

There are more expat buyers and sellers in the wider market compared with the period around the referendum a year ago, with the number of sales agreed up by 6% in June 2017 compared with June 2016.

Expat prospective buyers are seeing a lot of sold boards on properties they would like to buy with over 35% of estate agents property stock now being sold subject to contract.

So, a year on from the shock referendum result and subsequent dent in activity levels, the fundamentals remain strong and the future looks very positive indeed.

Low unemployment, low interest rates, strong demand and historic undersupply of homes are mitigating any wobbles in confidence. As a result, nearly half the properties on the market have sold signs on the boards.

The monthly survey, which is calculated on asking prices rather than completed transactions, comes at a time of year when the property market is typically quiet, as expat buyers and sellers take a break from the spring selling season and households concentrate more on holidays than house buying.

Data shows that the national average asking price for people buying their first home has dropped by 1.7% since last month to £196,000, but that figure is still 3.8% higher than a year ago, while the expat first-time buyer sector is the highest riser in the market during 2017.

Can we assist?

If you are looking for a new or re-mortgage please do get in contact and one of our fully qualified advisers will be happy to help.