4,000 NEW HOMES ALREADY SECURED WITH HELP TO BUY

Nigel Bull, one of a team of Mortgage Advice Bureau (MAB) financial advisers serving Besley Hill Estate Agents offices throughout Bristol and Gloucestershire, comments on the success of the Help to Buy Scheme and the outcome of the recent MPC meeting: “The June meeting of the Bank of England’s Monetary Policy Committee (MPC) marks the last time that the current Governor of the Bank of England, Mervyn King, will preside over the interest rate setting and monetary stimulus monthly meeting. The Governor is stepping down from the role at a time when the economic news finally looks to be moving more consistently in a positive direction. Several economic surveys in the last week or so have reported business expansion in the service sector, which accounts for some three quarters of the UK’s total trade, and importantly, due to the need for us to diversify our economy, expansion is also occurring in both the construction and manufacturing sectors. We understand that at the previous meeting of the MPC in May, King voted in favour of an injection of 25bn to stimulate the economy, however, the group vote was to take no action. This notion was upheld once again at this month’s meeting as the committee voted to maintain the base rate of interest at 0.5% and to refrain from further asset purchase. With the global economy now appearing to finally be heading in the right direction, we could see this attitude becoming a world-wide trend, with many central banks looking to refrain from further market intervention. The Government’s interventions to stimulate the housing and mortgage markets announced in the recent budget included the Help to Buy scheme, which has been operating for a little over two months. During that time 4,000 new homes have been reserved. This initial take-up is very positive and there are further measures due to come into operation in 2014 with the introduction of a mortgage guarantee scheme to enable lenders to offer mortgages at higher Loan to values on re-sale property. This is likely to give a further boost to housing transaction numbers and greater access to mortgage finance for those borrowers who have not been able to save substantial deposits or those whose equity has been eroded. Mortgage rates have continued to fall at the beginning of June from May with the average 2, 3 and 5 year fixed rates now at 3.74%, 4.06% and 3.88% respectively. Borrowers across the country remain firmly in favour of fixed rates with more than nine out of every ten borrowers during May and cumulatively opting for a fixed mortgage product. May has also seen a positive increase in the number of mortgage products offered to the market with more than 7,000 mortgage products currently available to the typical intermediary, almost a 6% increase over April and the highest number in more than 12 months.” To find out how you could take advantage of the Help to Buy scheme, call Nigel Bull on 0117 9325686, email him at nigelb@mab.org.uk or contact the MAB local mortgage specialist at your nearest Besley Hill office. Note: Your home may be repossessed if you do not keep up repayments on your mortgage. There will be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.