Inter Financial Weblog

 

Archive for Equity release

Mixed feelings in the Housing Market

Tuesday, August 5th, 2008

It’s been a turbulent year so far on the housing market, with Nationwide reporting prices showing their biggest annual fall since 1991, the year of Nationwide’s first survey.

The average home has now dropped by £17,000 in the last year, according to Nationwide – bad news for anyone hoping to sell and re-buy using equity in their home: The equity may just not be there any more.

Homeowners who took out interest-only or 90% or greater home loan deals are particularly at risk of losing everything if they fall behind on loan repayments. Those who need to sell up and were banking on rising prices to give them equity for a new home are having to stay put or face negative equity.

Fionnuala Earley, Nationwide ‘s chief economist said: “The weakening economy and poor housing market sentiment do not suggest that the market will recover quickly.”

However, the National Housing Federation has said that it expects house prices to rise by 25% by 2013, due to the lack of new houses being built. Demand is expected to outstrip supply in a few years, pushing prices back up.

In the meantime, economists are predicting that the Bank of England will be forced to cut the base rate as a means of curbing inflation, as fuel and food prices continue to rise.

Posted in Borrowing, Consumer Credit, Equity release, Financial news, Homeowner Loans, Homeowners, House buying, mortgages, Negative equity, Property, Remortgaging, Secured loans, UK Finance | 1 Comment »

Gap between cost of buying and renting narrows

Friday, May 2nd, 2008

Whilst it is still cheaper to buy a property and pay a mortgage over 25 years than it is to rent a property, the saving made by homeowners has gone down by 75% in the past year according to new research.

Figures show that over a traditional 25-year period of a mortgage, buying a property costs an average of £437,925. This figure is only slightly ahead of the average for renting a property for 25 years which cost an average of £443,736.

While in past years buyers could have expected to save somewhere in the region of £24,000 over 25 years, the impact of rising interest rates and rising house prices means now that the difference between buying and renting has fallen to just £5,811.

In some areas of the UK it is actually now cheaper to rent a property than it is to buy one.

Northern Ireland is a particularly bad area for buying when compared to renting. Property prices have gone up by 40% in the past year meaning that the average house buyer will now pay £572,814 for their property over 25 years while renters will only pay £392,097 for renting the property over the same period. This means by renting a property you will save a massive £180,717 over 25 years.

While the figures do include maintenance costs they do not include set-up costs for home loans. The figures also suggest that it would be cheaper to rent a property in Wales, the north-west of England, Greater London and Yorkshire.

Obviously these figures look at the matter solely from the view of payouts, and not from the security gained from home ownership. Additionally, equity grows as home loan repayments are made and as house prices rise, allowing homeowners to borrow secured loans against their property for both property improvement and equity release purposes.

Posted in Borrowing, Consumer Credit, Equity release, Financial news, Homeowners, House buying, Housing news, mortgages, Property, Rental property, Secured loans, Spending, UK Finance | No Comments »

Dorm Decoration

Tuesday, December 4th, 2007

It is amazing how many parents invest tens of thousands of pounds into their student’s education without ever thinking about their living arrangements. In fact, many students are left to scramble for whatever they can afford, and decorate with left over pieces and junk.

Our environments play a vital role in our emotional wellbeing.  Most parents know this. The concept of borrowing a secured loan, or a mortgage, to redo a teen’s room, a den for entertaining, or the basement, makes common sense.  But, parents rarely see the importance of treating a dorm with the same respect and concern.

Students need a place to unwind and relax, but it must also be an individual statement that lets them continue to grow emotionally, amid the confliction and confusion of a dorm, or student housing.

Student housing décor goes far beyond picking a wall colour and a couch. Many parents are shocked to realise that student housing often lacks a respectable bathroom.  Adding a pure water dispenser, a new toilet seat, and fixing the window coverings can be expensive, but they are vital to a student’s well being.

A secured loan is the best way to do this. It frees enough money to do the job right, in the least amount of time.  And, it can be paid back quickly, without high fees and penalties, depending on whether the property was leased for one year or longer.

A property that is leased for more than one year offers the parents some leveraging. They may be allowed to upgrade the bathroom, add a heating unit, and improve elements which would be the landlord’s responsibility if the housing was a permanent residence.

Posted in Borrowing, Consumer Credit, Equity release, Financial products, Home Improvements, Homeowner Loans, mortgages, Personal loans, Property, Remortgaging, Rental property, Secured loans, Spending, Student debt, UK Finance | No Comments »

« Older posts