Indeed on the back of the Monetary Policy pursued by the Bank of England there has been a notable improvement of macro-economic conditions!
In July, for example, it was announced that we have the lowest levels of unemployment for nearly 50 years. Furthermore, despite the UK construction industry building 21% more properties than same time the previous year, there has still been a disproportionate increase in demand for housing, particularly in the most thriving areas of the country. Repossessions too are also at an all-time low at 3,985 for the last Quarter (Q1 2017) from a high of 29,145 in Q1 2009. All these things have resulted in property values in Stamford according to the Land Registry are 6.84% higher than a year ago.
One vital bellwether of
the property market and property values is the mortgage market. The UK mortgage
market is worth £961bn and representative of 13,314,512 mortgages (interestingly, the UK’s
mortgage market is the largest in Europe in terms of amount lent per year and
the total value of outstanding loans).
It took a few months throughout the autumn of 2007 before
the crunch started to hit the Stamford property market, but in late 2007 and
the following 18 months, Stamford property values dropped by 20.1%.
Under the sustained pressure of the Credit Crunch, the Bank
of England realised that the UK economy was stalling in the early autumn of
2008. Loan book lending (sub-prime
phenomenon) in the US and across the world was the trigger for this pressure.
In a bid to stimulate the British economy there were six successive interest
rates drops between October 2008 and March 2009; this resulted in interest
rates falling from 5% to 0.5%!
Thankfully, after a period of stagnation, the Stamford
property market started to recover slowly in 2011 as certainty returned to the
economy as a whole and Stamford property values really took off in 2013 as the
economy sped upwards. Thankfully, the ‘fire’ was taken out of the property
market in spring 2015 (otherwise we could
have had another boom and bust scenario like we had in the 1960’s, 70’s and
80’s), with new mortgage lending rules. Throughout 2016, we saw a return to
more realistic and stable medium term property price growth. Interestingly,
property prices recovered in Stamford from the post Credit Crunch 2009 dip and
are now 36.1% higher than they were in 2009.
Now, with the Conservatives having been
re-elected with their slender majority, the property market has recouped its
composure and in fact, there has been some aggressive competition among
mortgage lenders, which has driven mortgage rates down to record lows. This is
good news for homeowners and landlords, over the last few months a mortgage
price war has broken out between lenders, with many slashing the rates on their
deals to the lowest they have ever offered. Last month, HSBC launched a 1.69% five-year
fixed mortgage!
Interestingly, according to the Council of Mortgage
Lenders, the level of mortgage lending had soared to an all-time high in the
UK.
In the Stamford postcode of PE9, if you added up everyone’s
mortgage, it would total £501,368,496!
Since 1977, the average Bank of England interest rate has
been 6.65%, making the current 323 year all time low rate of 0.25% very low
indeed. Thankfully, the proportion of borrowers fixing their mortgage rate has
gone from 31.52% in the autumn of 2012 to the current 59.3%. If you haven’t
fixed – maybe you should follow the majority?
In my modest opinion, especially if things do get a little
rocky and uncertainty seeps back in the coming years (and nobody knows what
will happen on that front), one thing I know is for certain, interest rates can
only go one way from their 300 year ultra 0.25% low level ... and that is why I
consider it important to highlight this to all the homeowners and landlords.
Maybe, just maybe, you might want to consider taking some advice from a
qualified mortgage adviser? There are plenty of them in Stamford.
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