Mortgages London | Mortgages in London

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With property prices on the increase across the UK, the asking price of London homes is once again becoming out of reach of the average first time buyer. A combination of strict approval criteria and high deposits means that many would be home owners can no longer afford to buy a property in capital. It has been calculated that over the last 12 months the prices have risen by 10%, leaving savers seeking free mortgage advice from London lenders.

The majority of mortgage products available to first time buyers have an LTV cap of 75%, which means borrowers raising a deposit of 25%, which for an average priced London property would be in the region of £25,000. Obviously if the trend in rising house prices goes on as demand continues to outstrip supply, this figure is going to become higher and less attainable. Although there are more high LTV products coming on to the market, even the return of 95% LTVs, the large majority of these are not available to a first time investor.

There is good news though for those who are happy to relocate. The rapidly rising prices are not as dramatic in Scotland, with a rise of just 2.2%, although the wise investor would think twice about relocating to Northern Ireland, where house prices dropped by nearly 9%. Borrowers are advised to consult with an independent broker or mainstream lender to get free mortgage advice in what might be harsh times ahead for first timers blighted by mortgage applications that favour those who already have a home loan.

This year only 35% of loans were for first time investors, which is the lowest figure since late 2007; and as it is these purchasers that dictate the success of the property market, there are bound to be dramatic changes afoot to help those with a small deposit purchase a home in London. Whether it is a return to high LTV loans, introduction of government schemes or the decision to relocate that makes the difference, getting the right free mortgage advice could save you thousands in the future.

Following the recent berating of financial services professionals for being responsible for the credit crunch through a lackadaisical approach to mortgage lending, the FSA are advising Londoners to seek better quality mortgage advice from London brokers. This in itself smacks somewhat of hypocrisy as the FSA have also suffered a bout of criticism for being slow to react during those troubled times.

Although there is no doubt that it was the financial institutions and not the general public that caused the economy to shudder in such a fashion, it is true that some mortgage applicants willingly massaged their net worth to obtain a mortgage they probably couldn’t afford . As such, the number of repossessions over the last year was high despite interest rates being incredibly low.

To prevent this happening in the future, Londoners who want to buy a property in the capital should obtain good quality free mortgage advice from a reputable broker or financial institution. Although new stringent lending policies have made it more difficult for many to obtain a mortgage, this also prevents customers from ending up with repayments they cannot afford and ultimately facing repossession.

This is because unless financial institutions change their lending practices, they will be held responsible again for any glitches in a slowly improving economy. To get reliable mortgage advice for free, take time to visit regulated lenders and discuss the possibility of getting a mortgage rather than going straight ahead and applying. Not only will this provide you with a wealth of knowledge to help make a decision about the type of mortgage that will be best for you, it will also preserve your credit rating, improving your chances of getting a mortgage in the future.

What many borrowers do not realise is that every time they apply for a mortgage, the lender performs a credit check which will affect a credit rating if the mortgage is refused. In some cases this applies to online quote forms without the borrower’s knowledge as the information is not made clear. This is why it is essential to ensure that any advice you seek is from a respectable, regulated, responsible and reliable source. Our advisors will be more than happy to give you a free mortgage quote, and call you at your convenience.

After an announcement by the Bank of England, it seems that mortgage rates in London may actually become lower over the course of the year. Fears have risen of late that interest rates would rise because of quantitative easing by the Government. However, sources state that inflation will continue to fall until well into 2011 which is good news for Londoners wanting to secure a mortgage deal now and gain a return on their investment in the future.

London property prices have risen consistently for over a year now, making the UK capital a favourable place to invest in a property. If rates are set to continue to fall, obtaining a tracker mortgage could be a wise move for anyone wanting to purchase a property. There has also been an increase in the number of properties for sale in London, with a 5% increase in March this year compared to the previous month.

It may seem like the options are endless for buyers at the moment, and with mortgage rates in London set to continue to fall, it is a great time to invest. House prices in London have risen by around 20% over the last year, which is well ahead of the national average, which means that these properties are likely to reap rewards for their owners in the future.

The advice is to speak to a mortgage broker and find the best mortgage possible to be able to snap up a property before prices increase further, and whilst rates are still falling. However, as with anything that is tied in with Government plans, there are risks involved. Sceptics have pointed out that in the past the current political situation has meant that interest rates have actually risen, but will of course increase mortgage rates.

Ultimately it depends on whether or not a buyer is willing to take a risk and get a tracker mortgage. If the interest rates continue to fall, this could mean massive savings, but if they rise, homebuyers could face a huge rise in mortgage repayments. The alternative is to take the safe option and obtain a fixed rate mortgage to avoid a possible increase in mortgage rates.

Prices for property in London have always been on the steep side and usually reserved for those who can afford to shell out £2-3xx,xxx for a semi or significantly more for a detached house. The average property price in Kensington and Chelsea comes in at just over a million pounds, yes the £1,000,000+ mark will get you a lovely flat, or if you’re feeling frivolous and have £2,000,000+ you could purchase a nice terrace or semi-detached house. Of course these numbers also reflect the fact that a ‘flat’ in Chelsea is usually the size of most houses so we can’t take the figures too much to heart.

Extortionate property prices aside, over the past year we’ve seen an annual increase of approximately 7.6% on property in the Greater London area, with the City of London and Richmond with the greatest increases of 24.4% and 22.3% respectively. There have also been losses in Barking and Dagenham, and the City of Westminster at 9.3% and 9.6% respectively. These figures are quite positive considering the house price crash of 07/08 and are particularly encouraging considering the current economic climate.

We must remember however that the Stamp Duty holiday for properties underneath the £175,000 threshold was applicable last year which would have artificially increased prices and sales, as January 2010 saw mortgage applications half, with only a 6% increase in February.

So over the board it’s a very shaky time for people looking to purchase a property, the rule of thumb tends to be expect property prices to double every 10-15 years, in London this figure seems to be a little shorter at 7-10 years as demand to live in the inner city will always outweigh the demand to live in the middle of no-where. However one must question have much further London can expand before we have to build another M25 around outer London.

For those of you looking to purchase a property in London and would like the best deal on your mortgage have a quick look at our mortgage calculator, then proceed to get a free quote from a dedicated advisor.