Our mortgage specialists provide an overview of the current market for those seeking to arrange lending

As at the 7th May 2008 the latest news is that the credit crunch would appear to be with us for the next two years and that the Bank of England is looking at maintaining the present base rate of 5% to hold inflation.

In the past, mortgage rates have been directly related to the base rate which in turn was controlled by the government and more recently by the Bank of England. However, things have changed, and it would appear that lenders are now looking at their exposure in the market place. It is clear that as soon as a lender has a product that is seen as the best in the market i.e. good rate, free valuation / legal work etc, the lender becomes flooded with mortgage applications. The high workloads cause severe congestion and long delays in producing mortgage offers, subsequent panic steps in and within a few weeks the lender increases arrangement fees and rates to reduce workflow. The mortgage market moves to the next prime rate and causes havoc for them.

The problem with this scenario is that lending rates become very volatile.

We have illustrated below some of the best rates in the market place, however these are only correct at the time of writing and may be subject to change. Therefore it would be prudent to contact us to find out which rates are still available and which best suit your specific needs.

The good news is that lenders still want to lend, but the higher the risk i.e. the amount being lent in comparison to value of the property, the higher the fees and rates.

As of 7th May 2008 examples of mortgages available:

Best Residential Fixed rate (purchase or re mortgage)
5.59% fixed for 10 years, arrangement fee £995
Available up to 75% LTV
Early Repayment charge 5% to end of fixed rate (10% reduction allowed pr year)
Fee free deal, no valuation fee or solicitors fees for a re mortgage

Best Residential - Medium Term (re mortgage)
5.85% fixed either 3 or 5 years, arrangement fee £995
Available up to 75% LTV
Early Repayment charge 5% to end of fixed rate
Fee free deal as above

Best Buy to Let
Available up to 75% LTV 5.84% fixed for 2 years.
Arrangement fee 1.5%
Early Repayment charge 3% to end of fixed rate

Best Buy to Let
Available up to 85% LTV 6.79% fixed until May 2013, Arrangement fee £799
Early Repayment charge 5% up to end of fixed rate

Best Self Certification ( no proof of income required)
Available up to 70% LTV 6.13% fixed for 2 years, Arrangement fee 2.0%
Early Repayment charge 7% first year 6% second year

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Coutts Private Finance is an introducer of business to The Mortgage and Finance Centre Limited which is an Appointed representative of Guaranteed Homeloans Network Services which is a trading style of Genesis Home Loans PLC and is authorised and regulated by the FSA.
Registered Office. The Coach House, 7 Mill Road, Canterbury, Kent, CT2 0AJ. Registered in England No. 5044247
YOUR HOME MAY BE REPOSSESED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
Posted on 8 May 2008.
Tags: private finance, mortgage, rates.

Set in idyllic surroundings this imposing family home sits in a 0.25 acre plot at the end of a private driveway. With Chartham's St Mary's church and the pretty River Stour providing a backdrop to the contemporary landscaping, the property occupies an equally commanding position.

Thoughtfully designed, this traditionally-styled property sits comfortably in the immediate landscape whilst incorporating the latest in eco-friendly technology. Beautifully finished to a high specification, the property offers extensive living accommodation that would suit a large family, whilst to the first floor lie five double bedrooms, two of which have an en-suite shower room.

Mill House lies within a short drive of Canterbury and is well located for access to the A2/M2 corridor and the A28 to Ashford. Canterbury boasts a wide range of shopping facilities, restaurants and entertainment, including the popular Marlowe Theatre, and street side cafes. Canterbury is well served by other amenities including a wealth of high-achieving schools and two mainline stations to London. Chartham mainline station is within reasonable walking distance and is one stop from Canterbury West and provides services to London via Ashford.

The property is available for immediate occupation at a monthly rental of £1700 pcm.

Posted on 8 May 2008.
Tags: letting, canterbury.

In the midst of much media speculation, Coutts Byers offers its own, ‘on the ground’ overview of the condition of the property market and explains how to take advantage of existing and renewed demand.

The state of the property market has received much hype in the press, who have no-doubt enjoyed sensationalising a subject that directly affects so many of the population. However, the mixed reports make it almost impossible to accurately gauge the current situation, particularly given the main sources, mortgage lenders and Land Registry, both use information  relating to sales agreed two or three months previously.

Our own experience is that there still remains a strong demand for property from a large buyer base, the majority of whom having previously broken chains, now reside in rented accommodation. However these buyers are all experiencing a lack of supply and whilst the two recent interest rate cuts may account for the increasing number of valuations that we are carrying out, demand continues to outweigh supply.

Also contrary to popular suggestion, we have not experienced a drop in prices, merely an alignment that precludes the over-optimistic asking prices of last year. Perhaps exacerbating the lack of supply and artificially skewing the perception of the property market, many of these over-optimistic and ‘over-priced’ properties from last year, remain on the market today.

All things considered therefore, it remains a sellers’ market, at least for those with desirable and realistically priced property. Early indications suggest that supply will increase over the remainder of this quarter and into the spring, so a shrewd homeowner might consider this an opportune moment to begin marketing prior to the spring rush, and one which capitalises on the current market situation.
Posted on 12 February 2008.
Tags: market review.

HIPS, one of the Government's great and considered inititives to help us all. Perhaps not, but who do they apply to, how much do they cost, what do they compose? Our guide aims to answer your questions.

The term ‘HIP’ has been banded around enough to become very familiar, however it is very apparent that very few homeowners are equally familiar with the content of a HIP, never mind the cost.

This uncertainty was little helped by the Government’s almost farcical introduction. The goal posts were moved again and again, both in terms of when the initiative became obligatory, for which type property and what the HIP included. One of the most significant turnarounds was the withdrawal of a survey, or Home Condition Report, as a required part of the HIP.

However it is now a requirement that all properties marketed since 14 December 2007 require a HIP (Home Information Pack). At the time of writing, the Government has not indicated whether it will extend this requirement to those properties already on the market prior to this date that did not already qualify for a HIP.

What does a HIP comprise?
There are several elements to a HIP, which can be divided into four main categories:

Sale Statement
This being a summary of the terms of the sale, including the address of the property for sale, the tenure and what’s included.

Searches
Obtained from the Local Authority, water board and drainage board.

Evidence of Title
Obtained from the Land Registry.

Energy Performance Certificate (EPC)
An assessment of the property’s energy efficiency and carbon consumption. This is undertaken by an assessor that will require a visit to the property.

If the property is leasehold, then a full copy of the lease is also required.

Who produces the HIP?

It is your estate agent’s responsibility to ensure that your property has a compliant HIP which is available for buyers to view. Different estate agents operate in different ways, some may produce the HIP in house, some use a HIP supplier and others use local assessors and solicitors. All of these methods should produce a HIP that meets the minimum requirements. However, it is worth considering both the cost and benefits of each method.

Coutts Byers has explored each of these options and found that, on a like-for-like basis, the costs for a fully compliant HIP vary little. However, there appears to be significant benefit in using a local solicitor that will continue to manage the conveyancing once a sale is agreed. Having produced the HIP, that solicitor will already hold the correct documentation relating to the sale thereby maintaining consistency and saving time.

Perhaps the overriding benefit is that, unlike large HIP suppliers that obtain cheap ‘personal searches’ from the Local Authority that are often NOT accepted by mortgage lenders, our solicitor acquires ‘full searches’ that are accepted by all lenders and recommended by the Law Society. Our view being that if we are expected to put together such a host of paperwork relevant to the sale, we should at least ensure that it is useful and sufficient for a buyer’s needs.

Does it delay marketing and how long does it take to produce?

Currently we are able to market a property immediately upon instruction, however we are required to have instructed the production of a HIP and have this available by exchange of contracts.

This period of grace lasts until 1 June 2008, at which point all properties will be required to have a fully compliant HIP available to buyers prior to marketing.

Producing a HIP is a relatively simple procedure, but one which requires application for, and receipt of documents from various authorities. Delays are common at times of demand, however, once a HIP supplier or solicitor is instructed, one should not expect the procedure to take more than a week. An EPC assessor will require access to the property in order to carry out an inspection. Coutts Byers retains several qualified assessors and can normally arrange an inspection between one to three days.

What is the cost?

The media originally speculated that HIPs were likely to cost between £600 and £1,000. Thankfully, and in no small part due to the withdrawal of the survey element, Coutts Byers is pleased to report that the actual cost is half of these early predictions.

The costs for providing the necessary searches and Land Registry information is published by the various authorities, and whilst small variations between authorities is not uncommon, it is not unreasonable to expect these to fall between £200 and £250.

The cost of the EPC is dependent upon the assessor and size of property, however the market rate is between £100 and £150.

Finally, one needs to consider the cost of compiling and producing the HIP. Again, this is dependent upon the supplier, however our solicitor will not charge for his time, providing you use him for the conveyancing.

If you would like more information regarding HIPs or require some advice, please contact Coutts Byers by telephoning 01227 456645 and one of our sales team will be pleased to help.

Posted on 12 February 2008.
Tags: hips.