Docklands News

A new report suggests that home owners end up £326,000 wealthier over a 30-year period than those renting – excluding potential house price growth. The Equity Release Council found that around 30% of homeowners saw their mortgage as an investment in their future. Nearly half of homeowners with a mortgage also agreed they were able to save more because their loan was cheaper than renting, thanks to unprecedented low interest rates. About 40% added that they believed having a mortgage in later life was becoming more acceptable and 57% said that they were looking at ways to release equity from their properties. 

The Times (17/08/2021)  

More property buyers have taken on longer loans to make rising house prices more affordable - but risk spending more in interest. The number of mortgages sold with 35-year term or longer hit a three-year high in March this year, according to a Freedom of Information request from wealth manager Quilter. The level jumped by almost 75% compared with the same month in 2020. It came as house prices rose at their fastest rate since 2007. The frenzied market and huge price increases meant borrowers were forced to agree to longer mortgage deals to afford home purchases, said Quilter. It noted that compared with a 25-year term, for a 30-year term, the total bill will be £16,500 higher because more interest is incurred. 

The Daily Telegraph (13/08/2021)  

The Halifax says house prices rose again in July after dipping the previous month, leaving prices 7.6% higher than at the same time last year. The average property price across the UK was £261,221 in July, with the highest rise of 13.8% seen in Wales and the lowest, 2.5%, in London. “This easing was somewhat expected given the strength of price inflation seen last summer, as the market began its recovery from the first lockdown, and with activity supported by the start of the stamp duty holiday", said Halifax managing director Russell Galley. “Recent months have been characterised by historically high volumes of buyer activity, with June the busiest month for mortgage completions since 2008. This has been fuelled both by the ‘race for space’ and the time-limited stamp duty break".

BBC News (06/08/2021)   City AM (06/08/2021)   The Times (06/08/2021)  

The property market will be hit by a wave of "down valuations" after a year of surging house prices, experts have warned. As a result, homebuyers may need to find thousands of pounds more in cash or risk losing their new home, while sellers face the prospect of deals collapsing. Mortgage brokers have reported a rise in down valuations, which occur when a surveyor, working on behalf of a bank or building society, values a property below the price agreed between the seller and buyer. The rise of bidding wars, thanks to exceptionally high demand and record low levels of property available to buy, has pushed up agreed sale prices. Scott Taylor-Barr of Carl Summers Financial Services, a mortgage broker, said buyers engaged in bidding wars had pushed prices up to a level that "simply can't be justified" by independent valuers. 

The Sunday Telegraph (08/08/2021)  

Homebuyers are taking on more mortgage debt as house prices soar. Mazars, a tax firm, found that 12.6% of property loans taken out in the first quarter of the year were by homebuyers borrowing at least four times their income. This was up from 11.4% last year and was the highest since 2016. The proportion of buyers borrowing less than two and a half times their income has dropped from 8.5 to 6.5% over the past five years. "Some borrowers may have overextended themselves," said Paul Rouse, from Mazars. "If the exit from the lockdown is bumpier than expected, this could lead to significant job losses [and] higher levels of personal insolvency." 

The Times (07/08/2021)  

The latest data from HMRC show Londoners pay the highest inheritance tax bill in the UK. Residents in the capital paid an average of £271,820 in inheritance tax on their estates in 2018/19 upon death. Over the UK as a whole, residents paid an average of £209,502 in inheritance tax in the same year. Residents in the north west paid the lowest average IHT bill in the UK, at £152,898 on average. Sean McCann, chartered financial planner at NFU Mutual, said: “Inheritance tax is feared by many but paid by relatively few. But with the average bill in excess of £200,000, it can make a significant dent in a family’s wealth for those that do get caught in the net.” A total of £5.69bn in inheritance tax was paid in 2020/21. 

City AM (10/08/2021)   Daily Express (10/08/2021)