Mortgage action could become prevalent in the coming weeks as pent-up demand is potentially unleashed as the economy reopens. Today, Halifax released their monthly “house price index” which revealed some interesting findings.
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This index, according to Halifax, is the UK’s longest running monthly house price series with data covering the whole country going back to January 1983.
The report is primarily focused on house prices but this month’s edition highlighted that demand alone has shot up in recent weeks.
As Russell Galley, the Managing Director of Halifax, detailed: “Activity levels bounced back strongly in June, which is typically the busiest month for mortgage activity in the UK.
“New mortgage enquiries were up by 100 percent compared to May, and with prospective buyers also revisiting purchases previously put on hold, transaction volumes rose sharply compared to previous months.
“However, whilst encouraging, it remains too early to say if this level of activity will be sustained.”
These telling signs caught the eye of Mary-Anne Bowring, the group Managing Director at Ringley.
She commented on what the figures revealed in the face of the current economic climate: “Today’s figures show potential green shoots of recovery with rising mortgage enquiries although it is clear lockdown and prolonged uncertainty are still having their effect and with no clear route out the pandemic yet, the for-sale market is likely to be subdued as buyers and sellers act cautiously and put off major financial decisions.
Mary-Anne went on to examine the impact that these figures should have on any government support packages.
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As she continued: “This is why government policies aimed at restimulating the housing market need to look beyond first-time buyers and existing owner-occupiers and tap into new sources of demand like buy to let landlords by scrapping the stamp duty surcharge they face.
“With only the private sector predicted to keep on growing and the disruption caused by Coronavirus likely to cause a short term spike in rental demand, the government could kill two birds with one stone by driving activity and meeting a growing housing need.
“Landlords are also an important source of development finance for housebuilders through off-plan sales and so cutting SDLT [Stamp Duty Land Tax] for buy to let investors could help housebuilding recover too.”
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People may be very keen to get back into action in the coming weeks and rush their mortgage plans through.
It is important that people don’t get ahead of themselves however and end up adding unnecessary costs and stress to their long term goals.
As the mortgage market and wider economy reopens it will be important to cover the basics first.
There is plenty of guidance to be found online and fortunately, the Money Advice Service have a free-to-use mortgage calculator on their website.
This tool will at first ask for the price of property and the size of the deposit the user has.
Once this information has been entered, the calculator will detail that the monthly repayments will be, along with how it will increase with added interest rates.
These costs can be adjusted in real time by tweaking the mortgage term with its default being 25 years.
Results for interest only mortgages will also be provided.
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