1. Insurance premiums on the way down
The latest AA British Insurance Premium Index shows that the average quoted cost for a combined buildings and contents policy has dropped by almost £20 in the last year. Premiums continued to fall in the three months up to 30th September 2014 and AA Insurance Managing Director Janet Connor says that “due to relatively mild weather in recent years, other than last February’s floods, insurer’s claims costs have been lower than expected (and) this has translated into lower premiums.” However homes at greater risk of flooding are most likely to have seen substantial hikes in premiums. Implementation of government plans to increase spending on flood defence may not be in place before November 2015, but homeowners at risk of flooding should be able to get insurance thanks to the introduction of Flood Re. Janet Connor adds that unless there is significant storm damage or flooding this winter, home insurance is unlikely to rise by much and is currently good value, but premiums will rise in general unless Flood Re and flood defences are funded sufficiently. For more information, go to The AA Newsroom.
My thoughts: It’s essential to make sure when you are buying you know whether you can insure your property or not. To find out about flooding, visit Environmental Agency and to find out about insurance, checkout our insurance checklist from Legal and General.
2. Cross-Party Cross-Sector Call for National Housing Consensus
Politicians from the three main political parties have signed a letter appealing for a national consensus on solutions to the housing crisis. The letter is supported by council leaders, homelessness and planning charities, leading architects and planners and the chief executives of housing associations and development companies. The letter acknowledges that good planning takes place outside election cycles and requires cross-party support, and agreement on a harmonised national strategy for home-building should be based on three interlinking objectives: thorough planning of development of Brownfield Sites in urban areas such as the London Docks, Salford and Bristol; expansion of existing towns but only with proper provision of additional amenities and support to existing transport networks; and new Garden City settlements with sustainable infrastructure appropriate to providing good quality of life.
My thoughts: It’s essential politicians get behind housing for the next election. For me I want to see every MP taking charge of housing in their area, giving voters a plan for what they are going to do about temporary housing, lowering council waiting lists and providing good value first time homes and a quality private rental sector.
Read - First time buyer quick guide
3. ‘Record-breaking’ equity release on the way up
New figures from the Equity Release Council show that lending topped £1 billion for the first nine months of 2014, and hit £375.5m in Q3, the largest amount ever seen in one quarter. Over 5,500 new customers amongst the over-55s were recorded, the highest in a single quarter for six years. Equity release continues to grow in popularity as people take their housing assets into account when planning for their retirement. The figures represent a 12% year-on-year increase, and the number of customers could well rise from 15,624 in 2014 to 20,000 by the year’s end. The average value of lending reached £67,467, up by 9% since last quarter and 18% by the same period in 2013, boosted by rising house prices. Lump sum and drawdown lifetime mortgages have also continued to climb, the former accounting for 40% of the total market in Q3 2014 and the latter 60%, versus 34% and 66% in the same period last year. Nigel Waterson, Chairman of the Equity Release Council, commented, “Equity release can offer a large and much-needed boost to people’s finances… it is critical that we continue educating consumers about the benefits… and increase the range of products at their disposal.”
My thoughts: Equity release can be a great way to stay in your home and release capital, but it is at a cost and it’s essential you only use companies who are members of the Equity Release Council. Equity release isn’t the only way of finding cash to help fund your retirement, so it’s worth speaking to an independent financial advisor beforehand so you consider ALL the options.
Read - Delivering a retirement Income Checklist from Chase de Vere
4. Lloyds to fund increase supply of homes
Lloyds revealing plans to launch a £50 million equity fund for small house-building projects across the UK to help remedy the lack of affordable homes. António Horta-Osório, Lloyds’ chief executive, said at least 60,000 are needed and that the housing market was critical to the ‘future prosperity of the UK’. A commission on housing will be set up, chaired by former housing ministers, to discuss supply of homes. Banks have been sharply criticised for not lending to SMEs and the Chancellor, George Osborne, announced in August that banks would be compelled to refer rejected loan applications to alternative means of finance. Meantime, other sources of funding such as peer-to-peer lending have grown in popularity. Lloyds said the fund would provide investment for SME house builders who were otherwise struggling to obtain funding for certain projects. For more, visit Fiancial Times.
My thoughts – making sure not just large, but small to medium sized developers can get building again is essential. We need 250,000 homes a year just to keep up with new households, let alone make up for the loss of 1 million homes which didn’t get built during the recession. When you consider we have 80,000 people in temporary housing and 1.6 million people on council waiting lists, clearly any new builds will be gratefully received by the public!
Read - Help to Buy a New Build Checklist
5. Lowest ever fixed rates from lenders coming forward
Nationwide is offering its lowest-ever fixed-rate mortgage. A new two-year fixed-rate deal is available up to 60 per cent LTV at a rate of 1.84% for new mortgage customers, and 1.74% for existing mortgage customers. The product fee is £999, reduced to £499 for first time buyers. The Society is also reducing certain fixed and tracker rates across by up to 0.65%: two-year fixed-rate deals go down to 0.55%, while three- and four-year fixed-rate deals are reduced by up to 0.50% and start from 2.29%. Five-year fixed-rate mortgages are reduced by up to 0.55% and start at 2.84%. Tracker rates are reduced by up to 0.65%, with competitive rates starting at 1.44% for the two-year tracker, available at up to 75 per cent LTV. Nationwide’s Divisional Director of Mortgages and Savings, Richard Napier, said: “We are … offering competitive fixed rate and tracker deals to all mortgage customers, whilst continuing to offer additional discounts for existing mortgage customers and first time buyers.” To read more, go to Property Reporter.
My thoughts – if you haven’t already, please review your mortgage, getting a good rate can save you thousands of pounds on your home or on buy to let investments. Ideally make sure you see a good broker who can work out what is best for your personal circumstances – following what your family or mates do isn’t the right approach to finance!
