Docklands News

Borrowers warned of retirement strife as mortgage terms stretch

Borrowers who opt for longer mortgage terms to lower payments may face difficulties in retirement, according to experts. The number of borrowers with mortgage terms of 35 years or more has increased significantly, with over 12,000 borrowers now repaying into their seventies. Concerns remain over the almost one million borrowers on partially interest-only loans. Personal finance expert Laura Suter warns that taking on mega-long mortgages without a plan to reduce them later could lead to financial strife in retirement. Mortgage broker Martin Stewart advises borrowers to have a repayment plan in place to avoid potential difficulties in retirement. 

The Sun (02/03/2023)  

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London postcodes at highest risk of default as interest rates rise

New research reveals that 19 of the 20 postcodes with the most “risky” mortgages - defined by the Bank of England as those where the loan is at least 4.5 times the borrower's earnings - were in London. The analysis by Mazars found that Wandsworth had the most risky mortgages, worth a total of £232m, while Battersea was second with £198m and Wimbledon was third, followed by Fulham and Tooting. The only postcode outside of London in the top 20 was Maidenhead, still within the London commuter belt. Mazars partner Paul Rouse said: “Areas like Wandsworth, Wimbledon and Battersea should be attractive to homebuyers even in the worst market conditions. Lenders believe that makes houses there a good risk for them to take.” 

Evening Standard (03/09/2023)  

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Property sales down 16% in July as reduced lending rates fails to stop hesitancy

The number of property sales taking place in July was 16% lower than it was in the same month last year, as reduced lending rates failed to allay prospective buyers’ hesitancy. Some 86,510 sales on properties were completed in the UK throughout the month, up 1% when compared to June, new figures from HMRC show. ’There is some hesitancy as to whether now is a good time to buy while there is uncertainty as to where interest rates will peak and what will happen with property values,” Gareth Lewis, managing director of property lender MT Finance, said.  ‘As we’ve been saying for a while now, we need some stability in order to give buyers and sellers confidence. The volatility of the past few months, combined with soaring living costs, are extremely unhelpful to the smooth functioning of the market.’

City AM  

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Brothers and sisters help each other buy first homes

Almost a third of first-time homebuyers in Britain received financial help from family, with support from siblings doubling in the past six years. Brothers and sisters assisted in a record 11% of family-funded first-time purchases, according to research from Skipton Building Society. The decline in homeownership rates among parents has led first-time buyers to rely more on other family members for deposits. Family support allows buyers to put down larger deposits and purchase homes at a younger age. While support from parents and grandparents is slowing, parents remain the most generous, with 72% of first-time buyers who had help receiving it from their parents, providing an average gift of £15,250. This was down from 80% in 2018. Some 8% were given money by grandparents, 4% aunts or uncles and 1% a son or daughter.

The Daily Telegraph (30/08/2023)   The Guardian (30/08/2023)   The Times (30/08/2023)  

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Delays in property registrations causing frustration among homeowners

Long delays in registering properties with the Land Registry across Great Britain are causing frustration among homeowners and buyers. Latest figures from His Majesty's Land Registry (HMLR) show that it is taking almost two years for some applications to make changes to the register to be completed. Emma Jones, managing director of mortgage brokers When The Bank Says No, said one of her clients who bought their property through the right to buy scheme in December 2021 is still not registered as owner. The Property Litigation Association told the Observer: "In some cases, parties are having to spend time and money dealing with issues on properties they sold many months before. In others, properties are being sold with hundreds of outstanding Land Registry applications against them which then have to be investigated".

The Observer (27/08/2023)  

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Extension or loft conversion could boost property value by 25%

According to research by Nationwide, an extension or loft conversion could add 25% to the value of a property, while an extra bedroom could add 14%. The study also found that an extra bathroom could increase value by 6% and a 10% increase in floor area could lead to a 5% uplift in property value. The research used data from Nationwide's lending records and factors such as property type, age, number of bedrooms and bathrooms, floor area, and location.  

Mail on Sunday (27/08/2023)  

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