November 2024 Newsletter
October brought a lot of activity. The property market was busy with plenty of completions and offers accepted.
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All this while we awaited the dreaded budget. I think we had all prepared ourselves for this and there were certainly a lot of people holding off to make any decisions until the budget was in hand.
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This month I'll look at the impact of this years budget, we'll also look at Professional Mortgages and the benefit of being in a recognised profession when it comes to a mortgage.
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Interest rates have been a bit up and down during October, which as a broker, is nice to see.
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In a stable economic environment interest rates increase and decrease all the time. These increases and decreases are set by the lender, when they find that their service levels are becoming poorer and that they are reaching capacity for the amount of customers they can take on they will increase their rates to become less attractive to consumers.
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On the opposite side, when a lender wants to attract new business they will make rate reductions to boost applications. This is why interest rates change on a daily basis, even when the Bank of England Base Rate remains the same.
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They will of course also look at the larger economic picture and so a week or two before the budget was announced, interest rates increased slightly.
I have included the comparable rates from October and November below.
The budget didn't really have much for us on the property side of things. One huge thing I noticed was that the stamp duty thresholds will revert to previous levels on April 1st.
This impacts first time buyers hugely. As it stands the thresholds are:
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Thresholds up to 31 March 2025
SDLT starts to apply when you buy property that costs:
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£250,000 for residential properties
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£425,000 for first-time buyers buying a residential property worth £625,000 or less
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£150,000 for non-residential land and properties
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Thresholds from 1 April 2025
SDLT starts to apply when you buy property that costs:
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£125,000 for residential properties
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£300,000 for first-time buyers buying a residential property worth £500,000 or less
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£150,000 for non-residential land and properties
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In the example of a £450,000 house for a first time buyer the stamp duty would be £1,250 today or £7,500 as of April 1st 2025.
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This is a huge difference in purchase costs for first time buyers and certainly an incentive to get going on the property search sooner rather than later.
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Mortgage Rates Today
What are "Professional Mortgages"?
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Professional Mortgages are products offered by some lenders to "professionals". In the main this will allow for additional levels of lending for certain professions.
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This list is dictated by the lender, a lot of the time this will be solicitors, doctors, pilots, chartered surveyors or accountants. Some will require you to be registered to professional body.
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Lenders understand that trainees in these fields will see steady increases in salary and these professions have a strong track record of a stable work environment which warrants a higher lending amount, usually up to 5.5x income.
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The lenders offering these advantages to professionals are usually more on the specialist lender side and so the rates can be higher than high street lenders.
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These days, there are a few high street lenders who will offer 5.5x income within certain parameters. The majority of the time it would be cheaper to go down this route if you can. It's important to check over all of your options, that's why a whole of market broker is key when you're reviewing options.
Jen Boulter