Zoe Perryman - Mortgage Adviser

Today's mortgage rates could look very good in a few months
Article from This is Money

Anyone inclined to give the government credit for today’s fall in inflation might wonder how much better they could have done were they not a squabbling bunch of reshuffled egos who plainly can’t stand each other.
The housing crisis would be solved. The NHS a gleaming model of how to do health care. International wars; what international wars?
The more prosaic truth is that inflation is out of its control in either direction. There’s not a lot it or the Bank of England could do about the energy shock that followed Russia’s invasion of Ukraine. Nor about the entirely depressing Israel/Gaza situation.
Rishi Sunak’s bet was that electricity and food price pressures would ease in time for Christmas. They haven’t stopped going up remember, they are just rising less quickly.
Today he gets to say he won that bet and given his luck in general, let’s allow him to bask in that for a bit.
An obvious extra boost is that the Monetary Policy Committee at the Bank of England now has no need to ramp up rates beyond the present 5.25%.
The three members who voted to do so at the November MPC meeting -- Megan Greene, Jonathan Haskel and Catherine L Mann – are today locked in their offices, avoiding colleagues who thought they looked out of line then and miles off the pace now.
From a practical point of view, if you are presently renegotiating a mortgage deal the best move must be to crack on.
Yesterday Halifax, HSBC and First Direct all offered newer, better deals. Halifax is offering a 5-year fix for borrowers with a 40% deposit at 4.53%.
Those aren’t the super cheap 2% deals of old. But they aren’t bad and will certainly look like good offers if there is another energy shock and inflation returns with vengeance.

Lender loosens BTL rental income cover
By Roger Baird 17th December 2021 2:57 pm

A lender has loosened its lending criteria for UK buy-to-let mortgages for overseas residents.

The Guernsey-licensed bank says the change in criteria, which comes into effect immediately, allows rental income cover to be 110%, rather than standard 125%, on loans over £250,000.

It adds qualifying applicants must earn over £100,000 a year, and debt to income ratios must come in at under 20%.

The maximum loan to value remains at 75%, and the offer is only available on the basis of one facility per client at 110%.

The bank says for a property valued at £1m, with a rental of £2,250 per month, based on its current five-year fixed rate of 3.24%, additional borrowing of £83,400 may be available.

It adds that it stress tests BTL applications at 5.50% on base rate tracker products and at the payrate on five-year fixed-rate products, for which the rental income is required to be 110%.

Business development manager Roger Hughes says: “The reduction in rental income cover means Skipton is able to account for more of the rental income than previously, which could potentially lead to enhanced lending.

“The UK property market remains in pretty good shape and, while some uncertainty remains, the fears of Covid-19 resulting in mass unemployment, recession and falling property prices have abated.

“Customers meeting the criteria will now have their mortgage application assessed at 110% of the annual rental income on our three-year base rate tracker, at 5.5% stress test, or at the payrate on any five-year fixed rate. This, therefore, gives greater borrowing capacity against their rental yield.”

** Trigger Warning **

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