Amora EscapesProperty 1012024-06-06T14:57:14Zhttps://amoraescapes.com/feed/atom/https://amoraescapes.com/wp-content/uploads/2022/11/Amora-Escapes-Favico.pngJonathan Barton<![CDATA[With home prices up more than 50%, some states try to contain property taxes]]>https://amoraescapes.com/?p=52332024-06-06T14:57:14Z2024-06-06T14:57:14ZFor retirees Tom and Beverly McAdam, the good news is the value of their two-bedroom…
]]>For retirees Tom and Beverly McAdam, the good news is the value of their two-bedroom home in suburban Denver has risen 45% since they purchased it more than six years ago.
That’s also the bad news, costing them thousands more in real estate taxes and leaving less for discretionary spending.
“To pay the higher property taxes, it just means we’ve got to take more money out of our investments when it comes time to hit those big bills,” Beverly McAdam said.
She backs a Colorado ballot proposal that could cap the growth of property tax revenue. It’s one of several measures in states this year to limit, cut or offset escalating property taxes in response to complaints.
Over the past five years, single-family home prices have risen about 54% nationally, according to S&P Dow Jones Indices.
That means higher tax bills for homeowners when governments don’t offset higher real estate values by reducing tax rates. And with offices seeing higher vacancies as people still work from home after the coronavirus pandemic, some commercial property values are declining, putting even more pressure on residential properties to deliver revenues.
“With assessed values skyrocketing over the past few years,” said Jared Walczak, vice president of state projects at the nonprofit Tax Foundation, “homeowners are clamoring for relief, and state policymakers are increasingly exploring ways to provide it.”
Colorado, like Alabama and Wyoming, also has a new law that will limit the growth in tax-assessed values for homeowners. Property tax relief will be part of a special legislative session beginning June 18 in Kansas, while Nebraska also could hold a special session to cut property taxes.
Georgia voters will decide in November whether to authorize a new law limiting increases in assessed home values for tax purposes to the rate of inflation, unless local governments or school boards opt out.
Five years ago, Lanell Griffith and her husband paid a little less than $2,700 in property taxes on their Topeka, Kansas, home in a historic neighborhood of tree-lined, brick streets. Their bill last year was more than $3,700.
“The government shouldn’t be able to arbitrarily just increase what they say you owe them without any sort of guardrails on that,” Griffith said.
Kansas lawmakers this year passed three measures that would have reduced the state’s property tax levy for public schools. But each was vetoed by Democratic Gov. Laura Kelly because of concerns about other sections to cut income taxes. The special session will mark a fourth attempt at consensus.
In Vermont, Republican Gov. Phil Scott has vowed to veto a bill that would raise property taxes by an average of nearly 14% to provide more money for public schools. Scott said people “simply cannot afford a historic, double digit property tax increase.”
In many states, property taxes are primarily a function of local governments such as counties, cities, school boards and special districts for libraries, fire departments and water systems. Each entity sets its own property tax rate, which is added to the others to come up with an overall tax bill for property owners.
State legislatures can intervene in a variety of ways. They can establish statewide limits on how much assessed property values can rise, create partial tax exemptions for all homeowners or provide income tax credits to help offset property taxes for certain people, such as those 65 and older.
But any relief carries consequences. Limits on the growth of assessed property values may provide a greater benefit to the wealthy. Exemptions for homes used as primary residences can shift a greater tax burden to rental properties and businesses.
“If you do this too much, you can now start tying the hands of your local government and cutting them off from the ability to raise revenue,” said Richard Auxier, a principal policy associate at the nonprofit Tax Policy Center.
While signing several property tax relief laws this year, Republican Wyoming Gov. Mark Gordon vetoed one that would have exempted 25% of a home’s value from property taxes. He said it “jeopardized the financial stability of the state and counties.”
Rob Romeijn protests property taxes outside Rockdale County offices in Conyers, Ga., on April 23, 2024. (AP Photo/Jeff Amy)
In 1982, voters in Muscogee County, Georgia, approved a local ordinance freezing assessed property values for homes used as primary residences. The result: longtime homeowners pay very little, newcomers pay more and businesses face some of the state’s highest property tax rates, said Suzanne Widenhouse, the county’s chief appraiser.
Last year, two similar homes worth around $330,000 had dramatically different tax bills. One, whose assessed value was frozen in the 1980s, owed less than $8. The other, whose assessed value was frozen when purchased about five years ago, owed $3,236, Widenhouse said.
“Anytime you grant an exemption, you create an inequality,” she said.
A Georgia ballot measure would amend the constitution to allow increases in assessed property values to be capped at the rate of inflation. But it wouldn’t undo past increases.
In the eight years since Rob Romeijn bought a ranch-style house on 10 acres (4 hectares) southeast of Atlanta, Rockdale County has raised the assessed value of his property from $127,000 to $230,000, also bumping up his property tax bill, he said.
As a Dutch immigrant with permanent residency, Romeijn can’t vote in elections in Conyers, but he was so unhappy about the increase that he made a sign urging people to vote out Rockdale’s commissioners and protested outside county offices in April.
Colorado also has been at the center of the property tax debate. The state has experienced decades-long growth in new residents, driving up demand for housing. Meanwhile, it has struggled to find a balance between providing tax relief for homeowners and sufficient funding for local governments.
A 1982 constitutional amendment limited residential properties to 45% of Colorado’s total property tax base while also setting a fixed assessment rate for commercial properties. To keep the ratio in balance as home values rose, residential tax assessments were cut, leaving less revenue for essential services such as fire districts.
Colorado voters repealed that constitutional provision in 2020. Since then, assessed home values have risen rapidly and the General Assembly has responded. The latest law, signed in May, is projected to shave over $1 billion annually off future property tax revenue by reducing tax rates and imposing growth limits.
But that’s not enough to satisfy some residents. The conservative group Advance Colorado backed a citizens initiative asking voters in November to cap all property tax revenue growth at 4% per year and is gathering signatures for still another ballot initiative to lower property taxes.
“People are saying this is too much growth; government doesn’t need this much money,” Advance Colorado President Michael Fields said. “People are genuinely scared of losing their houses.”
]]>Sean Potter<![CDATA[Commercial property sector expects more flexible lease terms in future]]>https://amoraescapes.com/?p=52262024-06-04T05:08:55Z2024-04-06T15:14:46Z The Republic’s commercial real estate sector expects lease terms to become more flexible for…
The Republic’s commercial real estate sector expects lease terms to become more flexible for both tenants in the future as the industry recalibrates to new post-pandemic realities.
A survey of some 250 commercial property professionals, conducted by business law firm Mason Hayes and Curran in late February, also indicates that the sector considers current rent review processes to be fair but ultimately wants better access to market data to level the playing field.
The Republic’s commercial property sector, particularly the office market, has come under pressure in the aftermath of the pandemic due to several interrelated factors. Hybrid working arrangements have eaten into demand for office take-up while many large employers — most notably in the global tech sector, which accounts for a significant proportion of office demand in Dublin — have reduced their headcount in response to shifting market dynamics.
Meanwhile, rising interest rates have made the cost of borrowing and servicing property-related debt more expensive for landlords and commercial property owners.
Headline rents are yet to decline substantially but close to half of survey respondents said they expect commercial leases to become more flexible for tenants and landlords soon.
However, a sizeable 46 per cent of respondents said they expect lease terms to become more tenant-friendly.
“Since Ireland legislated to end ‘upwards-only’ rent reviews in commercial leases in 2009, the rent review process has become more complex,” said Michael Doran, partner and co-head of real estate at Mason Hayes and Curran. “All parties must now agree an ‘open market rent’ that could be higher, lower or remain the same as the original amount. There are a number of factors that can affect rental value, from the strength of the market at the date of review to the assumed lease term.”
While an overwhelming 81 per cent of real estate professionals said the current rent review processes are fair, almost half said they would like better access to market data, reflecting a “move towards a more informed and data-driven negotiation process”, said Mr Doran.
Meanwhile, 61 per cent of professionals said their main goal when entering rent review negotiations was to achieve market-aligned rates while just 20 per cent said they are chiefly concerned with securing long-term occupancy.
]]>Javier Valdez<![CDATA[Foundation Home Loans launches Multiple Properties Under One Title product]]>https://amoraescapes.com/?p=52232024-06-04T05:08:50Z2024-04-03T15:09:30ZFoundation Home Loans has launched a suite of products specifically for landlords buying or refinancing Multiple…
]]>Foundation Home Loans has launched a suite of products specifically for landlords buying or refinancing Multiple Properties Under One Title.
Available to individuals, portfolio landlords and limited companies, and for letting on a standard Assured Shorthold Tenancy (AST), short-term let or holiday let basis, Foundation is able to lend against up to four individual properties or units on one freehold title.
Examples include where a number of farm buildings have been converted for residential buy-to-let (BTL) use, or up to four units within a single block – a ‘traditional’ multi-unit freehold block – but on one title rather than multiple titles.
Products include 2-year and 5-year fixed rates, available to both 65% and 75% loan-to-value (LTV), with rates starting at 6.69% for the 2-year deals and 6.54% for 5-year. The product fee is 2%.
The maximum loan size for 65% LTV is £3m and £2m for 75% LTV, with a minimum loan size of £100,000.
Tom Jacob (pictured), director of product and marketing at Foundation Home Loans, said: “By launching ‘Solutions by Foundation’ at the start of year, we have been able to look at more specialist lending requirements and to offer specific products that fit these niche areas, but are increasingly in demand.
“These new products for landlords seeking to either buy or remortgage Multiple Properties Under One Title fit that particular billing, and not only can we offer them for standard buy-to-let AST rental agreements, but we can also cover both short-term lets and holiday lets, which we believe is a strong offering within this particular sector of the private rental sector.
“Increasingly, landlords are looking at ways to broaden their portfolio, increase their yield, and focus on different areas of the rental sector. The concept clearly has similarities with existing Multi-Unit Freehold Blocks but in this scenario we can lend on up to four dwellings or separate houses or flats on just the one title.”
He added: “We’ll continue to look at opportunities such as these within the ‘Solutions by Foundation’ range and would urge advisers to look at our more traditional buy-to-let product range plus these specialist options in order to provide a full range of options to their landlord clients.”
]]>Ross Collins<![CDATA[Julie James returns as Welsh Housing Ministe]]>https://amoraescapes.com/?p=52202024-03-26T15:08:44Z2024-03-31T15:05:43ZPropertymark has welcomed the reappointment of Julie James as the new Welsh Housing Minister. Timothy…
]]>Propertymark has welcomed the reappointment of Julie James as the new Welsh Housing Minister.
Timothy Douglas, head of policy and campaigns at Propertymark, said the agency trade body is proactively seeking to arrange an initial meeting to help address future challenges across the housing sector in Wales.
He said: “We are pleased to see the reinstatement of a ministerial position with a dedicated remit concerning housing and have long advocated the need for this to be a devoted role given the magnitude of challenges that lie ahead in Wales.
“We are also pleased to see that Julie James continues in her housing role to ensure continuity.
“However, Julie James must use this opportunity to listen to concerns from the property industry and to end the prospect of rent controls in Wales.
“The minister must also work across government to increase housing supply by reviewing Land Transaction Tax on additional properties and support for the sector to decarbonise. In addition, a key priority must also include Propertymark’s long-term call for a Welsh Housing Survey to help gather better insight for evidence-based policy making going forward.”
]]>Jonathan Barton<![CDATA[Gorgeous potential first family home in highly desirable location on the market]]>https://amoraescapes.com/?p=52172024-03-26T15:04:56Z2024-03-28T15:01:47Z FINDING THE perfect first family home can be tricky, but a recent addition to…
FINDING THE perfect first family home can be tricky, but a recent addition to the property market in Gwent could be the answer.
Situated on Woodland Place in the community of Gilfach, Bargoed, this three-bedroom mid-terraced house could offer the ideal starter home for any family.
In what the estate agents describe as a “highly desirable location”, the property is within walking distance of popular schools and has plenty of local amenities nearby, including a convenience store and train station.
According to the estate agents New Horizons, the home could also be regarded as a “dream for anyone into cars or motorbikes”.
The property compromises of a entrance porch, open plan lounge/dining room, fitted kitchen, newly fitted ground floor bathroom, three generous sized bedrooms, double glazing, gas central heating, rear garden with paved patio and large garage with power and light.
It has recently been refurbished to a “high standard throughout”, with two double bedrooms and a single offering an ideal space for a family.
There is a feature fireplace in the lounge area, which could either be used for storage or for a wood burner, while the kitchen offers space for plenty of utilities, such as a tumble dryer, washing machine and dishwasher.
The ground floor bathroom has been fitted as part of the recent refurbishment, so is in excellent condition, as are all three good-sized bedrooms.
The house is being marketed by New Horizons Estate Agents, Bargoed, and currently has a guide price of offers more than £155,000.
New Horizons have said that the property is a “must be seen” before purchase, so if you would like to find out more details or book a viewing, you can do so on the website here, or by calling the estate agent on 01443 801564.
]]>Leon Clarke<![CDATA[Average house price-to-earnings ratios improved last year amid wage growth]]>https://amoraescapes.com/?p=52132024-03-26T15:00:53Z2024-03-26T14:59:32ZHouse prices have become more affordable since 2021, but remain in line with pre-coronavirus pandemic…
]]>House prices have become more affordable since 2021, but remain in line with pre-coronavirus pandemic trends, the Office for National Statistics said.
Housing affordability improved in three-quarters (75%) of local authorities across England and Wales in 2023, compared with the previous year, according to the Office for National Statistics (ONS).
Affordability worsened in just under a quarter (24%) of local authorities and remained the same in 1%, the ONS said.
Average house prices increased in just over two-thirds (69%) of areas compared with 2022 – but average earnings increased in a bigger proportion of areas, at 88%.
Kensington and Chelsea in London was the least affordable area last year, with an average house price-to-earnings ratio of 34.3.
(PA Graphics)
The most affordable was Burnley in Lancashire, with an average house price-to-earnings ratio of 3.7.
In 2023, 7% of areas typically had homes selling for less than five times the average earnings of workers. This was an improvement compared with 2022; however, in 1997, 88% of areas had this ratio.
The report said: “Therefore, affordability remains considerably worse than at the start of the series.”
Looking at England, in the 12 months to September 2023, the average home sold for £290,000, while average full-time earnings were £35,100.
This means that, in England, full-time employees could expect to spend 8.3 times their earnings on purchasing a home in their local authority area.
This represents an overall improvement in affordability compared with 2022, when the average home in England cost around 8.5 times the average wage.
In Wales, the average home sold for £196,500 in the 12 months to September, while the average workplace-based full-time wage was £32,400.
This gave an affordability ratio of 6.1, down from 6.4 in 2022.
House sales prices have become more affordable since 2021, but remain in line with pre-coronavirus pandemic trends, the ONS said.
The affordability ratio doubled in England from the start of the records in 1997 to 2007.
In 1997, a home in England was worth around three-and-a-half times the average wage, but by 2007 buyers faced paying just over seven times their salary typically to buy a home.
In Wales, affordability ratios doubled from 1997 to 2005 and peaked at 6.6 in 2007. Since then, they have remained between 5.5 and 6.5, with a less pronounced increase and decrease in the past three years than in England, the ONS said.
Mortgage rates have jumped amid increases in the Bank of England base rate, meaning that some existing homeowners could have a payment shock when their deal expires.
Recent signs that inflation is cooling have raised expectations around the potential for the Bank of England to start cutting the base rate in the months ahead.
]]>Sean Potter<![CDATA[Eight Golden Rules for Property Investors in 2024]]>https://amoraescapes.com/?p=52092024-01-23T13:08:29Z2024-02-10T12:38:41ZAn expert has shared his eight steps to help boost chances of securing capital growth…
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An expert has shared his eight steps to help boost chances of securing capital growth when investing in property this year.
Jonathan Rolande, the founder of House Buy Fast, says early signs indicate “growing positivity across the market”.
He adds: “We’ve seen three consecutive months of house price rises and it looks as if the repeated interest rate increases which dogged the market in 2023 are over. This will rightly encourage people to look again at property as an area to invest in.”
· Start by checking the demographics. Areas with more older people tend to hold prices well but don’t have as much potential for growth as there are fewer movers.
· Next, look at the schools, the building of a new school or college or an existing one that has improved its ratings is a very good sign. Many buyers and renters will pay more to live near a good educational institute.
· Thirdly, check the ratios – how many properties are on the market in the area and of those, how many are sold. 30 per cent-plus sold is a good indicator. Check rentals too, there should be no more than a handful of properties available to let in the postcode area.
· Four, investigate what prices have done in the past. It’s not a sure-fire way to predict the future but areas that have exceeded past increases or haven’t fallen as far in previous dips should be at the top of your list.
· Take note of crime rates the lower the better.
· Six, investigate any developments nearby. Developers investing millions into property in the area is a very good sign, just be aware that this can have a negative effect – the area could be flooded with buy-to-let, driving prices down.
· Seven, assess if the area is prone to flooding. Those which can be tricky but don’t be too alarmed by online searches. Many areas show a possibility of flooding at some time in the future.
· Finally, ask can you add value? With the right permissions and vision there are ways to improve properties to create more income in rent and the capital value. Moving a kitchen to the lounge area frees up a room, extending into the roof space or garden, changing the planning use or adding a garage can add value.”
]]>Scott Mcdonald<![CDATA[Housebuilder secures housing site in Barns Green for 32 new energy efficient homes]]>https://amoraescapes.com/?p=52062024-03-26T14:50:02Z2024-02-06T11:39:28ZLocated off Chapel Road, the site – to be known as Sumners Fields – is…
Located off Chapel Road, the site – to be known as Sumners Fields – is situated in Barns Green’s largely rural community, surrounded by expanses of countryside. Designed by Worthing-based ECE Architecture, the 32 homes will include one-, two-, three- and four- bedroom apartments and houses. 12 of these properties are allocated for affordable housing, providing an above policy 37.5% allocation.
Hunter Developments Holdings Ltd and the Smith Family worked in close cooperation with Sigma Homes in developing the design proposal for the site.
Geoff Potton, Chief Executive of Sigma Homes, said: “We are delighted to have secured another prime site in such a highly sought-after village, which is less than 5 miles from Horsham. With so many development proposals in the district currently held up by planning and pre-construction delays caused by Natural England’s current advice on water neutrality, this will be one of the first schemes to be delivered within Horsham District which achieves a water neutrality solution. The plans sensitively respond to the site characteristics and will result in a high quality, sustainable addition to Barns Green.
“This mix of open market and affordable homes – suitable for first time buyers, families, and downsizers – are much-needed to meet local housing demand. As with all our developments, this scheme will be constructed utilising timber-frame technology and a range of other ‘green’ features including grey water recycling, to enable residents to significantly reduce their water usage, carbon footprint and energy bills.
“2023 was a major milestone for Sigma Homes, as it marked our tenth year in business. With three other highly sustainable developments currently under construction across West Sussex, and with several more in the planning stage, we understand what our customers are looking for and the enviable lifestyle this county offers. The design, layout and build quality of our homes has been attracting discerning buyers for a decade now. We are immensely proud of the reputation for quality homes in prime locations that Sigma Homes have become synonymous with.”
The village of Barns Green is a highly sought after location and benefits from a range of local amenities, including a village shop, post office, primary school, sports club, and village hall. Regular public transport is available to nearby villages and towns, including Horsham. The site is a five-minute drive (2.2 miles) from Christs Hospital train station, which has services running to London Victoria in under 70 minutes. There is also a frequent 32-minute train service to Gatwick Airport. If future residents wish to have a day out or travel to the coast, there are also services running to the historic market town of Arundel (20 minutes) and the popular seaside resort of Bognor Regis (41 minutes).
The character of Barns Green is predominantly of a traditional style and material palette. Existing nearby properties include a combination of red brick and white painted window frames, timber-cladded rural homes, and more contemporary post-war dwellings. Due to the range of styles present within the village, Sigma Homes’ new development will follow a conventional yet modern style.
New landscaping, public open space, and ecological enhancements will be provided with most of the existing trees and hedgerows will be retained and enhanced. There will be sufficient parking available for each new home, as well as cycle storage. Electric Vehicle charging points will be provided to all houses with a garage and driveway, with further charging points allocated to the apartments.
Headquartered in the West Sussex town of Horsham, Sigma Homes was founded in 2013. The company has five live developments in premium locations across the south of England and is on track to deliver 200 homes per annum by 2026. All homes are constructed using timber frames, which improves efficiency, as well as delivering sustainability benefits. It was one of the first SMEs to be accepted onto the New Homes Quality Board, providing buyers with further peace of mind during the buying process, through the backing of this stringent new Code.
]]>Javier Valdez<![CDATA[Government enforces hefty fines for landlords breaking right-to-rent rules]]>https://amoraescapes.com/?p=52022024-01-23T11:38:24Z2024-02-02T11:33:42ZLandlords and letting agents who break right-to-rent rules could be hit with huge financial penalties. In August…
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Landlords and letting agents who break right-to-rent rules could be hit with huge financial penalties.
In August last year, the UK government announced that agents and landlords who allow rental properties to be let to migrants who do not have the right to be in the UK will face much larger financial penalties.
The legislation has now come into force this week where landlords could face a £20,000 fine.
Landlords could face prison
The penalties will increase from £80 per lodger and £1,000 per occupier for a first breach to up to £5,000 per lodger and £10,000 per occupier.
Repeat breaches will be up to £10,000 per lodger and £20,000 per occupier, up from £500 and £3,000 respectively.
Current rules mean that as well as facing a heavy fine, landlords could face potential imprisonment for failure to check the occupier’s right to rent status.
Landlords and agents have legal responsibility
All landlords and their agents in England have a legal responsibility under the Immigration Act 2014 legislation to prevent those without lawful immigration status from accessing the private rented sector.
The Home Office says landlords must complete one of these checks before commencing a tenancy:
A manual right to rent check (all citizens)
A right to rent check using Identity Document Validation Technology (IDVT) via the services of an Identity Service Provider (IDSP) (British and Irish citizens only)
A Home Office online right to rent check (non-British and non-Irish Citizens)
]]>Jeffery Blair<![CDATA[Labour has promised 25-year fixed-rate mortgages across the UK. Who do they benefit most?]]>https://amoraescapes.com/?p=51992024-01-23T11:33:08Z2024-01-29T11:29:04ZLabour has promised a “revolution” in the mortgage market to open the door to 25-year…
]]>Labour has promised a “revolution” in the mortgage market to open the door to 25-year fixed-rate mortgages for millions of homeowners.
Outlining her plan at the weekend, shadow chancellor Rachel Reevessaid longer fixed-rate deals would enable people to buy houses with smaller deposits and with lower monthly repayments.
Longer mortgages are common in countries like the US, Canada and Japan, but unlike in some of those, Labour is not proposing they be underwritten by the taxpayer.
Ms Reeves has asked those involved in carrying out a Labour review of financial services to work with the mortgage industry to find ways to remove regulatory barriers and help trigger a broader cultural shift.
Sky News’ Money team asked three industry experts whether they could take off.
Richard Donnell, head of insight at Zoopla, tells Sky News it is a “good idea”, but the challenge will be ensuring rates are as competitive as shorter-term deals, otherwise people won’t be willing to take them out.
The main advantage, he says, would be for first-time buyers.
“Today, the cost of a mortgage and renting is the same, even at 4.5% mortgage rates, but new borrowers are being stress-tested as to whether they can afford 8% to 9%,” he says.
The risk of high mortgage repayments means purchasers – especially first-time buyers – are finding it harder to get on the ladder. As they struggle to get a mortgage, rents have also been rising, leaving people with less in savings. Combined with historically high house prices, first-time buyers are finding it had to put aside the bigger deposits.
“The advantage of long-term fixes is it means you probably avoid the need to stress-test affordability,” Mr Donnell says.
“I believe the government needs to look at how it can support the market for longer-term rates to develop at rates that will support demand for this type of product, as it’s a big mindset change.”
Would Britons really want to lock in?
Kevin Roberts, managing director at Legal & General Mortgage Services, isn’t convinced as things stand.
“It is worth noting that 25-year fixes are already available in the UK, but receive relatively little interest. Typically, people tend to choose the product that offers the lowest rate at that time, and that’s usually a shorter-term product, such as a two or five-year fix,” he said.
David Hollingworth, a director at L&C, agrees.
“There’s potential to grow this sector but until pricing and tie-ins are addressed they may continue to be a useful niche option rather than a market wide choice,” he said.
Two other major drawbacks
Mr Hollingworth highlights another issue.
“Longer-term fixed deals will often tie the borrower in with an early repayment charge throughout the fixed-rate period,” he said.
So if a mortgage needs to be reviewed at some point, perhaps because someone wants to move house, options become more limited.
“Even though deals can be taken to a new property there is no guarantee that the borrower will still meet the lender criteria at that time, or whether the lender will have competitive rates for any additional borrowing.”
Perhaps more obviously, there is also the concern that rates may fall significantly, as happened after the 2008 financial crisis.
“There may be some concern that they will be left high and dry if rates were to subsequently fall,” says Mr Hollingworth.
What’s already on the market?
The most common longer fix is 10 years. First Direct currently offers a fixed rate of 3.99% over 10 years for a 60% loan-to-value mortgage.
Perenna is a new lender targeting the long-term market, offering rates that are fixed for as long as 40 years but that only tie the borrower in for the first five. They currently offer a 25-year mortgage at 5.75%.
Perhaps recognising the early repayment charge (ERC) issue highlighted above, Kensington Mortgages offers fixed rates for the life of a mortgage and although there are ERCs, they are waived in certain situations – like a house move or sale/repayment.
Who could they benefit?
As discussed, first-time buyers struggling to get on the ladder – but also people who want long-term certainty and perhaps have no intention of moving.
“For example, if they are saving for a wedding in X years’ time, it could be handy to know how much they’ll be able to put away each month if what’s likely to be their biggest expense, their mortgage repayments, stay the same,” says Kevin Roberts, from L&G.
