For more information contact your financial advisor at Thameside Associates on 01932 223870
Page 1 of 4
August 2021
Thameside Associates
HOME FINANCE NEWS
£17M A DAY PAID IN PROTECTION CLAIMS
UK HOUSING MARKET "ON FIRE"
WHATS YOUR BEST BET FOR BUY-TO-LET?
WHATS YOUR BEST BET FOR BUY-TO-LET?
£17M A DAY PAID IN PROTECTION CLAIMS
UK HOUSING MARKET "ON FIRE"

Association of British Insurers (ABI)1 figures show that the insurance industry paid out £6.2bn in life insurance, critical illness and income protection claims in 2020, which averages £17m a day, the highest combined figure on record and up 8% on 2019. 


Reassuringly, 98% of all claims were paid, virtually unchanged from 98.3% in 2019. Charlie Campbell, ABI Manager for Health and Protection said, “The pandemic reinforced just how valuable the protection provided by insurers has been. The high number of claims paid should give people confidence they can trust that their insurance provider will be there when they need them.” 

We can help you find protection cover to suit your budget, so please don’t hesitate to get in touch. As with all insurance policies, conditions and exclusions will apply. 1ABI, 2021

With house prices continuing to strengthen, many buyers are engaged in a race for space.

The extension of the Stamp Duty holiday, and subsequent taper, are helping fuel the market.  In June, Andy Haldane the Bank of England’s Chief Economist at the time, spoke at a conference, declaring the UK housing market “on fire” adding “There’s a significant imbalance between incipient demand and available supply of houses, and because the laws of economic gravity have not been suspended, the result is pretty punchy rises in house prices.” 

He also cited increased demand from richer households with savings accumulated during lockdown, as a factor adding heat to the market. He believes the market is likely to continue running hot with all these factors at play, combined with ultra-low interest rates. 

With demand for homes so high, buy to let is a solid investment choice. However, the rental yield you can expect depends on location.

Research from Seven Capital has revealed some top buy- to-let spots; Birmingham tops the list with an average rental yield of 5.4% and price growth of 14.2% over five years. Manchester, Derby, Liverpool, Nottingham and Newcastle, Leeds, Edinburgh, Bracknell, Sheffield and Glasgow are also on the list.

The vast majority of cities on the list were located in the northern half of the UK; although house prices are typically lower, many of them have bustling economies and have enjoyed significant government investment in recent years, increasing their popularity among renters.

Your home may be repossessed if you do not keep up repayments on your mortgage.


Sources: 
1Seven Capital, 2021

EQUITY RELEASE AVAILABILITY HITS RECORD HIGH

The number of equity release products on the market has reached a record high, with over 5001 products now available, resulting in greater choice and flexibility for consumers. The average interest rate for Q1 was 2.84%, which compares to an average rate of 4.16% in 2019.1

A resilient market
The equity release market is proving resilient to the impact of the pandemic and remains a popular way of accessing funding in later life. Analysis1 reveals that the value of new plans taken out in the first three months of this year totalled £1.07bn, with an average amount of £103,710 released in Q1, up 25% from £83,242 in Q1 2020.


Assess your options
Despite the growing choice of products and competitive rates, many people could be paying over the odds, unaware they can switch to a cheaper rate. Equity release brokers aren’t required by the Financial Conduct Authority (FCA) to keep in touch with borrowers once they’ve taken out a loan, or to inform them if there is an opportunity to switch. However, switching could save you a significant sum. A lifetime mortgage is a long-term commitment which could accumulate interest and is secured against your home. Equity release is not right for everyone and may reduce the value of your estate.
Source: 1https://media.kg-cdn.co.uk/

IS NOW A GOOD TIME TO FIX YOUR MORTGAGE?

Five-year fixed rate mortgages have dropped to the lowest rates on record, handing a boost to people wanting to get a competitive deal, whether remortgaging or buying a home. This comes after rates on some two-year fixes dropped below 1% recently for the first time since 2017.


More products available
According to Moneyfacts1 there were around 800 five-year fixed rate remortgage products available in early to mid-July. In an example of how competitive mortgage rates currently are, borrowers with a deposit of 20% deposit can expect to secure a two or five-year deal with a rate under 2%.


Will it last?
While the BoE kept bank rates low throughout the pandemic, it is only now that the lower rates are being passed on to borrowers. Many mortgage market experts feel that interest rates are unlikely to go any lower, and that borrowers are soon to see the tide turn in the form of rate increases. If you’re interested in taking advantage of current low rates to fix your mortgage, don’t hesitate to get in touch to see how we can help. Moving to a fixed rate could potentially save you money as well as giving you the peace of mind in knowing what your mortgage payments will be for the term of the fixed rate.


Your home may be repossessed if you do not keep up repayments on your mortgage. 
Source: 1moneyfacts.co.uk/mortgages/

Thameside Associates
Office:
01932 223870
Website:
www.thamesideassociates.co.uk
Email:
contact@thamesideassociates.co.uk
Address:
Terminal House Station Approach Shepperton, Middlesex TW17 8AS