Message from Simon Durant BA, CeMAP, CeRER
Welcome to the first Durant & Co weekly update.
I wanted to create something a bit more useful than another stream of mortgage headlines. There is a lot of noise out there, especially when rates move, lenders change their criteria or a new product launches. Most people do not need every industry detail. They just need to know what has actually changed, whether it affects them, and what their options might be.
Durant & Co is a hybrid brokerage, which means you can work with us in the way that suits you best. That can be 100% online, by phone or video call, or face to face by appointment. We help clients with mortgages, protection and estate planning, so we can look at the bigger picture rather than just one part of your finances.
Each week, I will use this update to cut through the noise and pick out the changes that are genuinely worth knowing about. I will keep it simple, practical and focused on what it could mean for you.
Mortgage Market Review and Changes
Fixed mortgage rates have been moving higher overall
Several major lenders have increased selected fixed mortgage rates over the past week, including Barclays, Halifax, Clydesdale and HSBC. Moneyfacts data reported by Mortgage Solutions showed the average two-year fixed residential mortgage rate at 5.90% on 22 September, with the average five-year fix at 5.92%.
That said, the market is not moving in one direction. NatWest has also reduced selected rates, including some purchase, remortgage and higher loan-to-value products from 24 September.
What this could mean for you
If your mortgage deal ends within the next six months, it is sensible to start looking early rather than trying to guess exactly where rates will go next. Starting early does not mean you have to commit immediately. It simply gives you more time to compare your options and understand what your monthly payments might look like.
How Durant & Co can help
We can compare your current lender with alternatives and look at the overall cost of a deal, including product fees and incentives, not just the headline interest rate.
Source: Mortgage Solutions.
Zero-deposit mortgage choice is widening
Gable Mortgages has launched a new 100% loan-to-value mortgage range, meaning eligible buyers may be able to borrow the full purchase price without a traditional deposit. Its standard five-year fixed zero-deposit mortgage is priced at 6.60%, with a lower 6.40% option on selected Barratt Redrow properties.
What this could mean for you
For some first-time buyers, saving a deposit is the biggest barrier to buying a home. A 100% mortgage may provide another route, but it will not be suitable for everyone. You still need to pass affordability and credit checks, and borrowing more usually means higher monthly repayments and less equity in the property at the start.
How Durant & Co can help
If your deposit is small or you are struggling to build one, we can look at the full range of low-deposit and no-deposit options and compare them with more traditional mortgages.
Source: The Intermediary.
More homes for sale is giving buyers more choice
Rightmove reported that average asking prices rose by 0.7% in September to £367,440, the first monthly rise since May. However, asking prices were still 0.8% lower than a year earlier. More importantly for buyers, the number of homes available for sale is at a 12-year high. Buyer enquiries and agreed sales were both 9% lower than a year ago, which suggests many buyers have more choice and, in some areas, more room to negotiate.
What this could mean for you
If you are buying, there may be less pressure to rush into the first property you see. Being prepared with a clear budget and an Agreement in Principle can help you negotiate from a stronger position. If you are selling, realistic pricing remains important because buyers have more properties to choose from.
Source: Financial Reporter.
Landlords should look beyond the headline rate
There have also been changes in the buy-to-let market. Rely launched limited-edition buy-to-let products with rates starting from 2.85%, while other lenders have continued to adjust their product ranges and criteria.
The important point is that some of the lowest headline buy-to-let rates come with larger product fees. Depending on the mortgage size and how long you plan to keep the deal, a slightly higher rate with a lower fee can sometimes work out cheaper overall.
What this could mean for you
If you are buying or remortgaging a rental property, it is worth comparing the total cost rather than choosing a mortgage simply because the rate looks lowest.
How Durant & Co can help
We can compare the rate, fee, rental affordability and lender criteria together, including options for individual and limited company landlords where appropriate.
Source: Mortgage Soup.
Protection Market Review and Changes
Many households still have no financial protection
The Financial Conduct Authority has published its final review of the protection market. It found that the market generally works well for people who already have protection and it is not proposing major new market-wide rules.
The bigger issue is the number of people with no protection at all. Around 58% of adults have no life insurance, critical illness cover or income protection, and 59% of those people have never considered taking any out.
What this could mean for you
If you already have cover, there is no reason to make changes simply because of this review. The useful question is whether the cover you have still matches your mortgage, income, family and financial commitments.
If you have no cover, it may be worth understanding what the different types actually do before deciding whether you need them.
How Durant & Co can help
We can review existing policies, explain the different types of protection in plain English and help you work out what level of cover is realistic for your budget and circumstances.
Source: COVER.
Source: Financial Reporter.
Source: The Intermediary.
Income protection is back in focus for first-time buyers and working households
New research from LV= found that 43% of UK workers have no form of protection in place. It also found that 37% of first-time buyers surveyed said they had not received protection advice.
Income protection is designed to pay a regular monthly benefit if illness or injury stops you from working, subject to the policy terms, waiting period and underwriting. It can be particularly relevant for households that rely heavily on one or two monthly incomes to cover the mortgage and everyday bills.
What this could mean for you
When buying a home, it is easy to focus on the deposit, mortgage rate and moving costs. It is also worth asking how long you could keep paying the mortgage and household bills if your income stopped because you were too ill or injured to work.
How Durant & Co can help
We can help you work out which monthly commitments matter most, then look at whether income protection, critical illness cover, life insurance or a combination might be appropriate.
Source: Financial Reporter.
Thank You
Thank you for taking the time to read our first weekly update. We hope it gives you a clearer picture of what is happening without making things more complicated than they need to be.
If anything we have covered relates to your plans, you are very welcome to get in touch and talk it through with us. There is no pressure, just a chance to understand your options properly.
The Durant & Co Team