Life happens
We all know that life events don’t move to fixed schedules.
Moving home is motivated by meeting the right person and wanting to buy your first home together. Or getting a new job and needing your own space. Maybe you need another bedroom (or two) or you’ve decided it’s time to downsize.
Rising energy prices may make the investment in a new energy-efficient home with lower fuel bills a sensible one for you. Moving closer to work or family may reduce your time spent commuting, or let grandparents share looking after their grandchildren.
These are different pressures that mean interest rates and property prices take on different priorities.
Affordability
We spoke to mortgage adviser Gail Reid for her expert advice on the financial side of buying a new home. She emphasised that the key consideration is always affordability.
“There’s a misconception just now that mortgage lenders have withdrawn all their products,” said Gail.
“Lenders are still willing to lend. They temporarily withdrew products that were no longer financially viable, rethought what they could offer and the products are now coming back onto the market.
“As we speak, they are slowly starting to return - there were 3,961 products a fortnight ago, now there are 2,371.
“However that’s not to say pricing hasn’t changed significantly from a month ago. With a mortgage adviser, we can look at your monthly household budget and provide you with a realistic option based on what you as a family can afford.
“But you can still borrow right up to 95% on new homes.”
Rapidly changing situation
We asked Gail the all-important crystal ball question – should you wait to buy? She gave us some interesting perspective on recent events.
“We should remember that interest rates have been at a historic low for many years now and they were only ever going to go one way,” she said.
“We’ve become used to dealing with fixed rates at 1.5% or 1.7%. There are borrowers now who have never paid over 2% interest on a mortgage. That is not normal, and interest rates have been incredibly low.
“The increase in interest rates is not unexpected, it is the speed of the change that has taken the markets by surprise.”
Fixed term
Gail told us that they have access to a comprehensive range of mortgage products and have noticed fewer lenders offering longer fixed terms beyond 10 years.
“The most popular mortgage product recommendation is for a five-year fixed rate, although there are lenders offering longer fixed terms of 10 years and beyond, which may increase in popularity in the current situation,” she said.
“Interestingly, we’ve had a lot of enquiries recently from people not wanting to put their move off. They’ve decided the situation might not improve and they want to fix rates in now, in case they do get higher.
“And there’s a lot of movement in older style properties that aren’t as energy-efficient and want to take advantage of new-builds and lower utility bills.
“Whether you’re renting or purchasing, that monthly payment still has to go out and essentially whereas we can fix your mortgage payment for a period, you can’t fix your rent.”
The North-east angle
Historically, the north-east of Scotland has always had its own economic micro-climate, thanks to oil and gas.
House prices fell dramatically in the years after the oil crash in 2014, when they were steadily growing across the rest of the UK.
And until the war in Ukraine in February this year – and the associated surge in the oil price - Aberdeen’s property prices had risen by 5.8% and those in Aberdeenshire by 7.9% since the start of the pandemic in 2020. This was against a Scotland-wide increase of more than 20%.
There are a lot of factors at play but the regional housing market is closely linked to the oil price, due to the fluid energy employment market.
And a resurgent energy sector has been heating the regional economy, which may well give us an element of insulation against the ups and downs of other financial factors.
Your CHAP home
As well as a beautiful new home, there are other incentives on selected plots at CHAP developments. These include CHAP paying your mortgage for a year, or an assured sale of your current home where CHAP will offer to buy it.
On selected plots, CHAP will add up to 5% of the property value to your saved deposit which lets you access a wider range of mortgage products at better interest rates.
Our new homes are built to excellent standard specifications but there are also site-specific aspects like free floorcoverings, rear garden landscaping, a top-notch kitchen specification or eye-catching light fittings on offer.
Full details are available on request. Get in touch to find out if now is the time for you to buy your dream new home.
https://www.chaphomes.co.uk/contact-us/
Gail Reid Mortgage Services gives you access to a comprehensive range of mortgage products and guide you to the most suitable mortgage for you and your circumstances.