Can equity release mortgages reshape society?

Monday, 1st February, 2021
equity release mortgages

Admittedly, this sounds like the type of question you might expect to find in a journal (or, at the very least, a trade media title). However, as an equity release mortgage specialist and Guildford mortgage broker, we believe that the answer is ‘yes’ – and here’s why.

For a whole host of reasons, many of which are generational (and not all of which can be blamed on the current global situation), young people are finding it increasingly tough to get a first time buyer mortgage.

This might be related to a reduction in available first time buyer mortgage deals. Or, it might be simple economics, whereby demand has pushed up the price of property, thus decreasing the ‘real’ value of a deposit that someone may have taken years to save and leaving homeownership out of reach. Regardless of the cause, it’s really not that easy for the next generation of homeowners.

And this is where equity release mortgage deals are making a big difference.

See, many of those aged 55 and over (the pre-requisite for equity release) are at the opposite end of the spectrum. They made money – sometimes a lot of money – on their property. More often than not, it was by pure luck and in no way the result of any shrewd business decisions. Property simply went up, and up and up.

But now, as they find themselves either financially secure or in the latter stages of their life, equity release – the process of freeing up wealth currently tied up in bricks and mortar – is becoming a way in which to help their children, and even grandchildren, get that foot on the property ladder.

We’re all aware of the term ‘bank of mum and dad’, but now the ‘bank of grandma and granddad’ is also becoming more commonplace, too.

Age Partnership has reported an increase in equity release as a way in which for those of a certain age to provide their loved ones with early inheritance gifts. Maybe last year’s equity release boom was to help family members buy a property before the stamp duty holiday ends this spring. Either way, it seems as though equity release mortgages are becoming a balancer – a way for the older generation to move wealth down a generation or two in order to give younger family members the same opportunities they once had.

In any case, equity release mortgages are becoming more popular. Given the struggles the youth of today face, it’s not hard to see why.

Are you 55 and over and thinking of applying for an equity release mortgage? If so, contact the Complete Mortgages team today on 01483 238280 or email info@complete-mortgages.co.uk. Similarly, if you’re the recipient of an equity release inheritance gift and are looking to apply for a first time buyer mortgage, get in touch.

By Mark Finnegan, Equity Release Adviser at Complete Mortgages

A boost for first time buyer mortgage seekers

Saturday, 20th October, 2018
first time buyer

Interest rates have gone up, but so too have the chances of first time buyers getting a mortgage with a small deposit.

Data from Moneyfacts has revealed that the average rates for 95% loan to value mortgages – mortgages for those with only 5% deposit to put down on a property – for two and five-year fixed rate terms have reached the lowest levels on record.

Whilst the period of recorded data only dates back to 2007, when Moneyfacts began recording it, 11 years is still a long time and this newfound accessibility for hopeful homeowners with a small mortgage deposit is significant.

Two-year fixed rate mortgages, for example, have fallen from an average of 4.16% in September 2017 to 3.73% today. Likewise, five year fixed rate mortgages have dropped from 4.57% in 2016 to 4.08% today.

You may think that this is at odds with the two recent interest rate rises, and to a degree you’d be right. However, there is speculation that lenders are keen to keep the first time buyer close so that they become the go-to lender at latter stages in the applicant’s property ownership lifecycle.

You could liken this to the motor industry, whereby those buying a car at the lower end of the manufacturer’s price range are nurtured as years go by in the hope that they stay loyal and buy something requiring a bigger budget as they progress in life.

Of course it’s all relative, and we shouldn’t forget that in today’s market, where there is a huge swathe of competitive mortgage deals on offer, 3.73% and 4.08% is still significantly higher than the ‘standard’ mortgage. That said, if you’re someone who’s looking to enter the property market and you only have five% to put down, then at least there are now more attractive first time buyer mortgage deals to get you on the property ladder.

As a mortgage broker in Guildford that specialises in first time buyer mortgages – including some of the more specialist mortgages such as mortgages for teachers and mortgages for self-employed people – Complete Mortgages is here to help.

If you have a 5% deposit then contact a member of the team on 01483 238280 to discuss your options and find out how you, too, can get two feet on the property ladder. Alternatively, email info@complete-mortgages.co.uk.

Guildford mortgage lending is on the up… but so are its property prices

Thursday, 1st June, 2017
Guildford mortgage

Let’s start with the universally good news – mortgage lending to homebuyers increased by 27% in March.

The figures, as released by the Council of Mortgage Lenders (CML), suggests that even first time buyer mortgages were on the up across the UK, with 31,500 loans granted in March 2017 compared with 28,100 in March 2016.

As a Guildford mortgage broker, Complete Mortgages’ March was particularly busy; so busy in fact that it bucked the national trend by being a staggering 82% up on March 2016.

As a local mortgage broker this is, of course, good news. However, it’s also good news because it highlights that the Guildford mortgage market continues to move apace and suggests that we can expect this trend to continue as we head into summer (a period when home moving and home buying activity typically tends to slow down).

On the flipside, there is the issue of Guildford’s rapidly increasing property prices. And whilst this isn’t bad news for those who already own a home, it is unlikely to be met with positivity by those itching to get their feet on the property ladder.

Research by online estate agents House Simple has shown that outside of London, the UK’s least affordable areas include Bath, Brighton, Crawley, Tunbridge Wells and, of course, Guildford. In fact, less than 7% of Guildford properties are priced lower than the national average.

So, what does this tell us? Well, it confirms what we already know; Guildford is an expensive and desirable place to live. It’s also likely to be met with concern by first time buyers whose chances of buying a property in Guildford are arguably much slimmer than this month’s national averages from the CML would suggest.

However, what Guildford first time buyers must remember is that there are hugely competitive first time buyer mortgage deals entering the market all the time. And with 85% loan to value mortgages on 4.5 x earnings now available, the Guildford first time buyer is now able to enter the market without having to rely solely on putting down an astronomical deposit.

Are you a first time buyer? If so, then our advice is to contact the Complete Mortgages team, which specialises in first time buyer mortgages, to discuss how we can help move you towards homeownership.

Just remember that as Guildford property prices increase, the relative value of your deposit decreases, so taking action sooner rather than later is advised before homeownership really does become out of reach.

Contact Complete Mortgages on 01483 238280 or email info@complete-mortgages.co.uk to discuss our services, from first time buyer mortgages and commercial mortgages to buy to let mortgages and limited company buy to let mortgages.

By Mark Finnegan, Director at Complete Mortgages