It seems appropriate to close off 2014 with a summary of the mortgage and property industries. Key points of activity in the past twelve months include the Mortgage Market Review, the Stamp Duty reform and the ongoing rate war between lenders.
A year of recovery and growth
2014 has been an interesting year for mortgages and property and the general feeling in the financial world is that it’s been a period of recovery and growth. Lending has increased by around 15% in the past twelve months and measures are continually being taken to ensure that growth is steady and won’t spiral out of control as before.
Mortgage Market Review (MMR)
The MMR was introduced in April by the Financial Conduct Authority (FCA) as a measure to prevent careless lending.
Here, borrowers need to demonstrate that their monthly outgoings could cope with future rate increases should they arise. On the whole, the MMR has been accepted and implemented well and confidence continues to grow as 2015 approaches.
Stamp Duty Land Tax (SDLT)
The Autumn Statement bought a couple of surprises, however the biggest was regarding the restructuring of SDLT, which took immediate effect on 4 December 2014.
Great news for anyone mid-house purchase who will most likely now save a few pennies on SDLT to spend on redecoration, perhaps.
The “slab” rate approach of before has been replaced for a tiered structure. Properties under £125,000 are exempt from SDLT all together and after that the proportion of the property value is taxed within set brackets.
These changes are expected to help 98% of homebuyers save money on their transaction. Only those purchasing properties valued at over £937,000 will end up paying more SDLT than in the previous structure.
It’s expected to help first time buyers and continue to improve on the steady growth within the property and mortgage markets in the last year.
Mortgage rate war
2014 has seen some activity around mortgage rates and it continues into the new year.
At the start of the year, there was uncertainty around the Bank of England rate changing and then an air of hesitancy when it did change in mid-2014.
However, towards the end of this year, mortgage deals have come back onto the market, some even as low as 0.99% for a 10 year fixed arrangement.
It’s the lowest rates the market has seen since 2007 and there may even be further discounts to come.
Starter home initiative
It was announced this year that 100,000 new homes will be built for first time buyers. This is expected to be one of many schemes on the horizon to help get the property and mortgage markets back on track.
Mortgage advice from specialists
Whatever your situation, as a doctor or dentist, Dental & Medical Financial Services can help answer your questions and work to find you the best mortgage rate for your situation.
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