On Thursday, 4th August 2016 the Bank of England lowered the base rate to 0.25%, this is a record low level and the first change since 2009.  This is in response to the economic forecast for the latter parts of 2016 being in a negative position.  The Bank said "growth will fall dramatically, announcing the biggest downgrade to its growth forecast since it started Inflation Reports in 1993".

The decisive decision to lower the rate again will hopefully stop the economy dropping into recession.  In recent months the Lincolnshire market has responded well to the decision to leave the EU.
There is mention of an even lower 0.1% rate as an option should it be required.

Moving forward with the new record low interest rates, mortgage applications are set to rise.

Andrew Harrod, Mundys In-House Mortgage Advisor, says “mortgage rates are already incredibly low, so if you are looking for a deal and you qualify, why wait.  Now is an excellent time to buy, don’t hold back”.

As the rates drop savers are set to earn less on investments in banks so property is a very attractive option.

We have properties that are currently producing returns of 6% and 7%, far higher than saving accounts, so property continues to be a sound investment.

There will also be a new scheme, the Term Funding Scheme, which will provide extra finance to banks to encourage them to pass on the cut in interest rates to businesses and consumers.

Quantitative easing is a way the Bank of England buys Government and business debt, allowing more money for the markets to be available, this is set to rise to 70 billion.

The Governor of the Bank of England has said that banks have "no excuse" not to pass on the lower borrowing costs to customers and will be charged a penalty if they fail to do so.

Following on from my last blog on leaving the EU, our advice here at Mundys is to keep moving forward with your plans.  Life goes on, families grow, people change jobs and situations and now is the perfect time to buy the house of your dreams.

Please don’t hesitate to call myself or the sales and lettings team if you want any further advice.  Andrew Harrod is also available to discuss your mortgage requirements if you are considering buying your new home or considering a purchase as an investment.

The mortgage market review is the most important piece of mortgage legislation to be released in a decade.

In the past, people have been able to take out mortgages that they clearly could not afford. On 26th April 2014, new rules were implemented to try and ensure this doesn’t happen.

The new rules only apply to residential property and not ‘buy to let’ and second homes.

When an application is submitted the lender will assess your incomes as before but there is now a bigger emphasis on outgoings. This is to make sure the debt is affordable, not only now but also into the future. They will also try to assess what effect an increase in interest rates may have on your ability to pay.

Generally, a combination of 3 month’s payslips and bank statements are used to determine this.

There has been a lot of misinformation about what items are taken into account but, with a common sense approach and a little preparation, getting a mortgage should be no more difficult. Follow our advisers advice, we can make your life easier.