FINANCIAL ADVICE CENTRE NEWS
Your Autumn Newsletter 2022
Mortgage and Property News
Don’t give up your protection policy
With households facing the biggest squeeze on their incomes in many years, it’s understandable that families are looking for ways to cut costs.
When looking to cut back, reviewing our subscriptions and direct debits (for example, for streaming services, food subscription boxes or gym memberships) is often a good place to start, but there is one cost that you shouldn’t be so quick to give up.
Protection is vital
As tempting as it is to cancel protection insurance policies, times of financial difficulty are exactly when we need protection the most. Many policyholders aren’t aware that life insurance cover can be flexible, and there are ways to reduce your cover rather than cancelling it outright.
Get in touch
If you have any questions about your protection policy please do get in touch. We can help you organise your finances and keep your vital protection cover in place.
More home moves than pre-pandemic
The number of home movers fell 35% year-on-year in the first half of 202212, a drop that was widely expected following last year’s uniquely busy pandemic-influenced market.
Still high
In total, 172,510 people moved house in the first six months of this year, well below the 266,270 who moved in the first half of 2021. Last year’s record, however, was heavily influenced by the government’s Stamp Duty holiday and pent-up demand from lockdowns. Indeed, excluding 2021, this year has seen the busiest start to a year for home moves since 2008.
Trends
All UK regions have seen the number of home movers fall in 2022, with Greater London experiencing the biggest decline (45%). Last year, detached homes consolidated their top spot for home moves, accounting for a 7% higher share than a decade ago. Home movers have also become slightly younger in the last ten years, with the average age now 40, compared to 41 a decade ago.
Resilience
Despite the challenging circumstances, the housing market remains resilient. We can guide you through the busy market and help you stay focused on your goals.
12 Halifax, 2022
Mortgage market review
It’s been a busy couple of months in the mortgage market, with rising interest rates and new product ideas dominating the discussion.
Rate rises
Following the Bank of England’s decision to raise interest rates, two million mortgage holders with standard variable rates or tracker mortgages are already facing higher repayments. Bank Rate increases will also impact those with fixed-rate contracts, many of whom will face higher costs when their current deal ends. Although 83% of existing mortgage holders are on fixedrate contracts, almost a third have short agreements of up to 24 months13.
Fifty years
How would you feel about repaying your mortgage for fifty years? Ultra-long mortgage deals are one of the government’s proposed solutions to help more people own a home. The plan would help more people build equity rather than paying rent, with a longer mortgage period allowing larger sums to be borrowed.
Yet calculations14 reveal just how expensive these mortgages could turn out. For example, assuming a 75% loan-to-value mortgage, an average home price and an average fixed rate of 6.19% (comparable to current market deals for a forty-year term), monthly repayments would stand at £1,140. Over a fifty-year term, therefore, this means £472,984 paid in interest alone!
Here to advise
We’re on top of all the breaking news and new ideas. With so much happening right now, getting the right advice is more important than ever. Wherever your property journey is heading, we’ll help you navigate the choppy waters.
13 Bank of England, 2022, 14 Barrows and Forrester, 2022
Property pitfalls for holidaymakers
Do you always lock your windows before going on holiday? If not, you’re not alone. A new survey15 has revealed some of the bad holiday habits of UK homeowners. Two in five respondents don’t check their windows are locked, with a similar number failing to check the doors. Just under half make sure no valuables are visible through the windows. This is despite the fact 14% of people have had their home burgled, with an additional 11% having experienced an attempted burglary.
Open invitation
Moreover, the survey showed that one in ten homeowners leaves a key under a doormat or plant pot when heading away. Although this can allow neighbours to check on your property, it might also give easy access to burglars.
Turn it off!
Half of respondents said they switch off electrical appliances that aren’t needed, while a fifth remember to turn off the water.
15 Aviva, 2022