News

Market update
Portability of mortgages has seemingly become a serious issue, with cases highlighted in the media where people have been unable to move because they cannot get mortgages, even where they wish to downsize and need smaller loans.
Many people who would very much like to move house, especially downsizers, are unable to do so because they are trapped by their mortgage.
In essence, since they took out their existing mortgage a few years ago, lending criteria have tightened under the MMR regulations introduced in April 2014.
This means that most home owners who wish to move house are obliged to requalify for a new mortgage from scratch, even if they wish to reduce their existing mortgage by moving to a cheaper property.
Since the recession most people’s income has remained the same or risen modestly, but mortgage lending criteria has tightened considerably, meaning many people who qualified under the old rules, pre 2014 no longer qualify! They are of course entitled to keep their existing mortgage on their current property and as long as they make their monthly repayment, everyone is happy. Except they can’t move!  Unfortunately their mortgage is not portable to a new property under the new lending criteria, they have to requalify for a new loan on the new property.
This means many people are trapped in their existing property.
There are now 45% fewer homes for sale than in 2007, many people are trapped by their mortgage, many can’t afford the new Land and Building Tax (stamp duty) on top of the purchase price and many are just scared for their jobs.  
In contrast, Buy-to-let lending is now the highest since 2007, representing 18% of all new mortgage lending in September.
Trade body the Council of Mortgage Lenders says that buy-to-let remortgaging rose 62% on an annual basis in September, while buy-to-let lending for house purchase was up 36% on last year. Buy to let was not covered in the 2014 Mortgage Market Review!
It would seem the rental sector is set to rise still further.
Bill Reid BEM BA NAEA DipPFS