Currently viewing the tag: "interest rates"
Buy To Let Investment Beating Pension Investments

Buy To Let Investment Beating Pension Investments

Buy To Let More Popular Than Traditional Pension Saving

There has been a lot of editorial commentary in the media focusing on the surge in UK Buy To Let property investment over recent weeks.

There are numerous reports that the total value of properties owned by 2.5 Million buy-to-let investors is fast approaching the total amassed in workers’ pension schemes built up over decades of employment.

The Telegraph reckons that a total of £1.25 Trillion (GBP) has been invested in buy to let property and this figure is still increasing compared to £1.6 Trillion (GBP) that has been invested in pensions.

Changes to pension legislation announced by Chancellor George Osborne in the Spring 2014 budget, could see more money taken out of pensions and put into the UK’s Buy To Let (BTL) market.

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Banks To Be Stress Tested On 35% Drop In House Prices

Banks To Be Stress Tested On 35% Drop In House Prices

Banks Stress Tested On 35% Drop In House Prices
And 5% Rise In Interest Rates

UK and Continental banks are to be stress tested using a worst case scenario in an effort to assess if they could cope with a house price slump of 35% or a sudden spike in interest rates to more than 5%, the exercise will be monitored by the Bank of England.

Sky News broke the story on Monday ahead of an official announcement on Tuesday by the Prudential Regulation Authority (PRA), after learning that banks would be subjected to an armageddon style scenario to see if they have sufficient capital to withstand another economic slump.

A series of commercial real estate losses is expected to be applied to the banks’ balance sheets as part of the tests, but it’s not certain whether or not the interest rate hike will be quantified as part of the tests, but the 35% slump in property prices could reveal if banks and building societies would need to raise billions of pounds of fresh capital to survive, unless they can demonstrate their ability to withstand such a huge slump.

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Mortgage Market Review Hits UK Property Market

Mortgage Market Review Hits UK Property Market

Mortgage Market Review Affected Housing Market Before Launch

The new regime for the approval of mortgages came into force over the weekend (26th April 2014) but even before it was officially launched it was having a dramatic effect on applications, with loan offers being carefully scrutinised and the impending process had lenders asking even more questions before approving any mortgage offer.

I experienced the vagaries of the system myself, when taking a call from a lender the day before funds were due to be released, I was asked to provide even more details than ever before on a loan application, culminating in further delay to purchasing, and the details I had to provide and verify could have been done weeks before.

The lender said the additional information was in order to comply with MMR and this was before the official launch date. The property I was purchasing should have completed last week, before the MMR introduction date, but the delays caused by the lender requesting verification of the additional information required to process my loan meant that the loan process was delayed and resulted in dragging things out, until 9am today, when my solicitor called me to say that the purchased had finally completed.

The additional requirements of the MMR will result in the death of quick purchasing by property investors, however, I now know that in order for loans to be agreed that I have to provide extremely detailed accounts, financial projections, and provide verified proof of everything I have ever done in order to prove affordability.

The personal finance industry publication Mortgage Strategy says 7 out of 10 mortgage brokers reckon that it will be harder and slower for prospective purchasers to get a mortgage loan under the new MMR regulations.

For all new mortgage applicants it means not only providing evidence to the lender of all income and earnings including payslips or audited and verified accounts for the self-employed, but also requires providing details of all spending, too.

Mortgage applicants must itemise and cost spending on things they cannot do without, as set out in a list provided by the Financial Conduct Authority (FCA), including food, household cleaning and laundry, all heating costs, water bills, telephone, essential travel and existing property charges such as council tax, buildings insurance, ground rent and service charges for leasehold apartments.

Applicants must also disclose discretionary spending on clothes, household goods, personal goods such as toiletries or leisure activities.

The FCA says mortgage applicants must itemise other debts such as credit card bills, outstanding loans, child maintenance and alimony payments.

Mortgage lenders and finance providers must consider how interest rates are predicted to change over the next five years, to gauge the affect on borrower’s mortgage repayments. If payments are likely to go up then the lender will check that the borrower can afford it based on disclosed financial commitments.

And if mortgage terms extend into a borrower’s retirement, the lender has to check on pension income predictions too, in order to judge continued affordability.

BoE Base Interest Rate Set To Remain Low Until 2015

BoE Base Interest Rate Set To Remain Low Until 2015

Base Interest Rates Set To Remain At
Low Levels Until The End Of 2015

A new economic forecast by Ernst & Young’s (EY) independent forecasting group, the Item Club, reckons that Bank of England (BoE) interest rates will remain at their historic low until the end of 2015 as wages start to outstrip inflation.

The Bank of England’s base rate has an impact on mortgage loans on property and savings returns and with the base rate remaining at 0.5%, it expects house prices to rise by 7.4% this year and 7.2% next year.

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Activate Your Wealth Powerswitch To Increase Your Property Income

Activate Your Wealth Powerswitch To Increase Your Property Income

Activate Your Wealth Powerswitch To Increase Your Property Income

The content offered on the links below really isn’t for every property investor and if you’re easily offended, don’t read the rest of this post!

If you are a freebie seeker, or have no intention of ever using property to build your own wealth…Sorry… this offer definitely isn’t for you!

It’s only for people who are willing to work hard, people who try their best to learn a little more every day, and property investors who want to get more cashflow out of their buy-to-let property portfolios.

You’ll know if this offer is right for you.

Your Private Link: Activate the switch

  • It’s time to leverage the skills you already have.
  • It’s time to shift the world’s perception of what YOU can do as an investor.
  • It’s time to neutralise the worry of things outside your control…Interest rates, the housing market, taxes, regulations.

Because after this, you won’t have to worry.

Your Private Link: Activate the switch

It’s time to take action and lead the way, time to grow a real business that gives you a proper income, and to command authority on your terms.

This is not a ‘business opportunity’, get rich quick scheme or a ‘sack your boss’ offer…

(I have always thought that our readers were smarter than that!)

And if you are one of those people who believe that ‘working from home on the internet using one weird trick’ is going to make you a fortune…Then maybe its best you move on to the next blog post or find an alternative site to read.

Because you only need to click the link if you are willing to use your brain to get what you really want.

Your Private Link: Activate the switch

See you on the inside!

Owning Property Is Better For Financial Security

Owning Property Is Better For Financial Security

Mortgage Payments Vs Savings: Property Provides Better Returns Over Traditional Saving Methods

There was a report in the Daily Express last week that said property owners have saved more than others with traditional savings accounts and ISA’s.

The report reckoned that the Bank of England’s record low interest rate has saved property owners almost £20,000 (GBP) over the last six years in inflated mortgage payments. However traditional savers have lost out by almost the same amount, prompting calls for more help for savers and warnings that borrowing could create a new debt crisis.

Bank of England statistics reveal that the record low interest rate of 0.5%, reached 5 years ago today, has been a mixed blessing for the UK.

Interest rates started to tumble back in 2008 and by March 2009 the Bank of England’s base rate had reached 0.5%, promoting cheaper borrowing.

Property owners with a £100,000 Standard Variable Rate (SVR) mortgage could have saved almost £20,000 (GBP), because mortgage payments were around £3,300 (GBP) a year lower than they were in early 2008 before the financial crash ended the previous property boom.

Savers with £100,000 (GBP) in cash ISAs lost around £18,500 (GBP) over the same period.

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Interest Rate Rises Could Stall UK Rental Property Market

Interest Rate Rises Could Stall UK Rental Property Market

Interest Rate Rises Could Decimate
UK Rental Property Market

The recent changes in the dynamics of the UK property market are forcing a number of mortgage lenders and property investment specialists to advise clients how they can better protect themselves.

The Governor of the Bank of England, Mark Carney, has claimed that the BoE has no immediate plans to increase the base interest rate, currently remaining at the 0.5% record low, however this situation could change within the next twelve months.

The UK property market remains in a fairly delicate state and affordable residential properties are being bought with amazing speed, as the UK economy continues to improve but property prices are predicted to rise considerably over the next few months.

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EU Commission Fines Rate-Rigging Banks

EU Commission Fines Rate-Rigging Banks

EU Commission shocked that competing banks were in collusion

The European Commission has fined eight banks – including RBS – a total of £1.4 Billion (GBP) for forming illegal cartels to rig interest rates. The cartels operated in markets for financial derivatives, which are products used to manage the risk of interest rate movements.

A number of banks were engaged in the rigging of interest rate products intended to reflect the cost of interbank lending in euros, while another group fixed prices for products based on the Japanese yen.

The rates are used to set the price of Trillions of dollars (USD) of products, including mortgages.

Some were involved in both markets and more than one cartel, including RBS, which was fined a total of £325 Million (GBP). The fines are the first ever penalties for interest-rate rigging by the EU.

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PIN Founder and Top Property Investment Educator Simon Zutshi

PIN Founder and Top Property Investment Educator Simon Zutshi

This is a reminder about the free Property Time Bomb webinar tonight at 7pm with Simon Zutshi all about how you can avoid the property Time Bomb.

If you would like to join Simon on this webinar all you need to do is Click Here and register your details and we will email you with the webinar joining instructions.

If you are already a landlord then you need to listen to this webinar in which Simon is going to explain about the property time bomb that most investors are sitting on, and more important what you can do right now to make sure you are prepared and profit rather than lose out.

Many property investors and landlords are blissfully ignorant of the potential property time bomb they are sitting on, so when we heard that Simon Zutshi is running a no cost webinar tonight  –  Tuesday 29th October 2013 at 7pm, all about what to do about this situation, we thought we really should let you know so that you have the opportunity to listen in to find out what Simon is doing right now to his portfolio to ensure that he maintains his high level of cash flow, and discover the various options open to you as property investors and landlords.

If you would like to join Simon Zutshi on this webinar all you need to do is Click Here and register your details and you will be emailed with the webinar joining instructions, but you do need to act quickly as there are only a few places left on this webinar and attendance is limited to just 500, so we recommend you secure your place right now to find out how you can protect your cash flow.

Click Here Now To Register!

 

Are You Sat On A Property Time Bomb?

Are You Sat On A Property Time Bomb?

How Can Property Investors And Landlords

Avoid The Property Time Bomb?

As we keep telling you, NOW really is a fantastic time to be investing in UK property, finance is more available, there are plenty of property deals out there and property prices are rising! Many people are beginning to think that we may even be entering a new property boom!

However, is this really good news for existing landlords?

You see, this situation could cause a really BIG problem for any existing landlords and property investors who own rental properties.

Rising property prices will contribute to inflation, which in turn will probably trigger the Bank of England (BoE) to raise interest rates to slow down the economy and this is the potential time bomb if you currently have investment properties.

The issue is that most property investors have become very used to the low Bank of England base rate of 0.5% which, means the repayment rate for many Buy-To-Let mortgages has been around the 2% to 3% mark.

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There Will Never Be A Better Time To Invest In Property

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