“Home movers were very busy locally in May, with our advisers assisting a significant number of clients who were purchasing. In particular, we noted that there was an increase of ‘second steppers’ and mid-market movers than First Time Buyers, although it’s possible that this is due perhaps to a lack of available properties at entry level, rather than demand waning. Having said that, of the First Time Buyers we did arrange mortgages for, we noted that more and more are opting for higher Loan To Value mortgages, where only a five or ten percent deposit is required. We would suggest this is probably due to the fact that, in recent weeks, the rates on lower deposit mortgages have become far more competitive than we’ve seen previously. It’s also potentially good news for the ‘Bank of Mum and Dad’ in terms of not having to find such a large amount to contribute towards helping their offspring fly the nest.
Another trend of particular note was an uptick in Buy To Let purchases last month. Investors are now coming back to the market having taken taxation advice, and are very much still in evidence, albeit that they are now far more strategic in terms of how they structure their purchases than previously.
We also assisted a number of clients in May with their remortgage, with many finishing their previous fixed rate deal and anxious to lock in again whilst rates are still low. However, we’ve seen a surprise resurgence in the popularity of two-year fixed deals, with some clients deciding to go for the cheaper rate over a couple of years rather than pay slightly more for the longer-term security of a five-year fix, following on from the Bank of England base rate being held at the beginning of the month. Feedback from advisers suggests that quite a few clients are now more confident that rates will still be low in a couple of years’ time, and with two year rates so low at the moment, are happier to go for a shorter term product.
As for the market overall, business was brisk locally in May, with not enough desirable homes coming onto the market, and those that were coming under offer in a short period of time. We even saw a couple of cases where properties came under offer before they hit the market, underscoring the fact that decent properties in desirable areas are still selling exceptionally quickly, providing that they are realistically priced.”