Who else is egg-cited for Easter?

Would it be an Easter blog without an egg-cellent Easter pun?

We haven’t stopped in February and March and have been blown away by the volume of appointments and customer we have helped. Thank you to all of our clients existing and new for keeping us busy with mortgage and protection.

Kate and a group of ladies from the office were treated to an overnight event at Wembley by our network Primis. The daytime conference was a chance to find out about new products and providers, and catch up with our business development managers, and we were treated to talks from guest speakers Carl Froch and Alex Scott.

The evening was a chance to let our hair down with Wembley as our backdrop, and Vernon Kaye on the decks. There were a few sore heads on the journey home but what an experience for the group and how lucky we were to have been invited.

Shout Out

I wanted to give a special mention to Yasmin. She was my first employee when I set up Redditch Mortgage Advice, and I am proud to say she has now qualified as a Protection Specialist. Yasmin works primarily in the Birmingham office for her face to face appointments and Teams calls for those who prefer. Congratulations Yas!

Poor Kelly

Kelly had some bad luck last week whilst playing netball and has broken her ankle. She is back in the office after a long couple of days in A&E, and apart from a few adjustments to her diary and she has moved her desk downstairs, it’s business as usual.

There is so much going on in the news.

I feel some nights all I am doing is scrolling the news and working out how changes may impact our clients. These have been my main takeaways from recent news and why they may affect you and your mortgage.

Interest rate news- rates have held again at 5.25%

It’s worth noting that the Bank of England rate changes don’t always mean that the mortgage rates will behave the same way at the same time, as other factors influence these, and the weeks preceding a rate decision lenders may have already changed rates based on predictions, so there may not always be a corresponding increase or decrease based on the Bank of England news. Lenders make their decisions about rates based on SWAP rates. (I will let you google this yourselves!) 

The market is still volatile. We saw rates reducing early into this year; however we have had increases again in February and March, but do not panic – the increases have not been to the extremes that we saw in 2023!

• The average 2-year fixed rate has increased from 5.56% in February to 5.76% in March.
• The average 5-year fix has risen from 5.18% in February to 5.34% this month.
• Standard Variable Rates (SVRs) have also increased slightly, with the typical SVR at 8.18%. The SVR is the rate which borrowers revert to when their initial product ends if they don’t switch to a new product.
• The average 2-year tracker variable mortgage stayed around the same at 6.15%

The main thing I want you to take away from this is that the market is still unpredictable, and the need for seeing a broker to navigate through all of the options and information that is available is really important, and as early as possible. We have some days as brokers where we will get a message from a lender that some of their products are increasing, and others decreasing. The average shelf-life of a mortgage product reduced to 15 days.

This means the length of time a rate is available before being pulled has decreased. So more than ever, it is important to have a broker working hard for you.

(source for facts whatMortgage 12 March 2024)

Budget and Costs news

Here are just some of the changes to income and expenditure that have been announced that may affect you.

• There have been welcomed changes to Child Benefit. Currently, you start to lose this if one parent earns over £50,000 and completely lose it at £60,000. From April 2024 it will increase to £60,000 when you start to lose it and £80,000 when you completely lose it.
• National Insurance will be cut from 10% to 8% for employees, and 8% to 6% for the self-employed from April.
• National Minimum Wage and National Living wage are both changing with more people qualifying for national living wage and rates for both going up.
• Tax rates are frozen. The salary thresholds when people start paying income tax and national insurance remain frozen – this means that you will pay more tax as your income rises, a process called fiscal drag. So, this may offset the benefits seen from national insurance cuts, and mean people end up paying more tax.
• Younger children in England to get funded childcare hours from April 2024.
• From 6 April, the higher rate of tax paid on capital gains from selling property has reduced from 28% to 24%. Basic-rate taxpayers currently pay 18% on their gains, while higher and additional-rate taxpayers pay 28% (soon to be reduced to 24%). The government motivation behind this change will ‘encourage landlords and second homeowners to sell properties, making more available for buyers’.
• Stamp duty tax break for purchasing multiple properties to end in June.

(source www.gov.uk)

• Council tax increases where are offices are based- Redditch increase of 2.99%, Birmingham 9.99%. (source both council websites).
• Energy costs will decrease for the period April – June 2024 (source ofgem)
• Water- Severn Trent which serves a lot of our clients, has increased the cost of a combined bill by an average of 6.5%. (Including metered and unmetered households) (source www.stwater.co.uk)
• TV licence- increase from £159 to £169.50 ( source tvlicensing.co.uk)
• Mobile phone and broadband increases will rise by up to 8.8%.( source moneysavingexpert 11/03/24)

So why am I mentioning all of this to you?

When we look at arranging a mortgage for a client, one of the main parts of the appointment will involve affordability, and looking at a budget planner for you to see what your income and expenditure currently looks like and how this may change with a new mortgage.

This is to ensure the mortgage and protection we recommend is affordable and you are comfortable with your monthly payments. It’s good to have an idea of the changes that are happening, good and bad, and we can make you aware of this and factor this into your budget plan, and what you can afford for your monthly payment.