Essentially Mortgages – Quarter Two 2019

Overview

LENDING MONEY TO YOUR FAMILY – HOW TO DO IT RIGHT

Rising property prices relative to incomes have made it increasingly hard for young adults to raise a deposit for their first home. Unsurprisingly, research shows that the Bank of Mum and Dad continues to be a major lender, supporting more people than ever. It’s estimated1 that 27% of all buyers in 2018 received help from friends or family, up from 25% in 2017.

GOOD NEWS: HOMES ARE BECOMING MORE AFFORDABLE

It’s good to be able to report positive news from the housing market. The affordability of housing in Britain is improving at its fastest rate since 2011, according to recent analysis.

The average asking price for a home in the UK is now £300,715, the Rightmove house price index for February found. This is just 0.2% higher than last year’s average, while wages grew by 3.4% over the same period, outstripping asking prices at the fastest rate since 2011.

EVEN SMALL MORTGAGE OVERPAYMENTS MAKE AN IMPACT

When you take out a mortgage, your lender calculates how much your monthly repayments need to be to ensure your mortgage is paid off at the end of the term. This is based on the interest rate, the number of years you are borrowing for, and the total amount you have borrowed.

SUBSIDENCE CLAIMS CONTINUE TO REACH NEW LEVELS

The long hot summer of 2018 has led to a huge rise in subsidence problems. The Association of British Insurers7 have reported that claims quadrupled to the highest level in more than a decade. In just three months of 2018, over 10,000 households made subsidence claims worth a total of £64 million. This increase represents the highest quarter-on-quarter jump since records began more than 25 years ago.

INSURING NON-STANDARD PROPERTIES

One of the major attractions of the UK property market is the wide choice it offers – cosy thatched cottages, grand manor houses made from ancient materials such as wattle and daub, modern prefabricated timber-frame homes and even picturesque houseboats.

LAND ACCOUNTS FOR OVER HALF OF THE UK’S WEALTH

Many of us might think that one of the UK’s major economic challenges stretching back over the last few decades has been the continuing rise in house prices. Whilst it’s true that prices have increased nearly tenfold since 1979, the problem it seems lies with the cost of the land they occupy.