Northern Rock will cut the rates on its mortgage products including its buy to let products. The news comes as other lenders such as HSBC and the Woolwich lower their rates to more affordable levels.
Northern Rock also plans to raise their maximum loan to value levels on their best deals.
The news, in particular that of the buy to let mortgages, has been hailed by many as a return to competitive activity within the Buy to Let mortgage market.
Friday 16th October
The nationwide today has stepped forward with 2 new offers to help open up the market for first time buyers.
The offers are as follows; a £500 discount off any reservation fee’s or a £250 discount off reservation fee’s and no legal’s to pay.
The offers are available on The Nationwide’s 3, 4 and 5 year fixed rate deals and also on its 3 year tracker deal.
Mortgage director at Nationwide, Andy McQueen, said: "We are reducing the amount that [first time buyers] need to pay upfront and so hope we've removed a barrier which may have prevented people from buying a home ."
The move will be welcomed, however the true barrier to first time buyers at the moment is the excessive deposit amounts required by all major lending institutes, making a £500 discount as practically useful as a £5 reduction for most.
Friday 16th October
The National Association of Estate Agents (NAEA) and the Association of Residential Letting Agents have formed a coalition named “1808 Coalition” after the date Stamp Duty was introduced.
The two groups and of course the coalition they form, believe the reinstallation of Stamp Duty at its normal levels will be detrimental to First Time Buyers and Buy to Let Investors.
Stamp duty, which is normally in place for transactions on residential property above £125,000 in value has for some time sat at £175,000 in a bid to re-light the fire under the housing market, however it is due to return to 125,000 on December 31st this year.
Stamp duty is applied to the total sum paid in consideration for a property where that sum exceeds the threshold. For example on a property transaction of £190,000, £1,900 is due in stamp duty (1%), not as many believe 1% of the sum exceeding the threshold i.e. £15,000 (£190,000 - £175,000) or £150 in stamp duty.
Chief executive of the NAEA, Peter Bolton-King, said: "Stamp duty is a barrier to entry for many first-time buyers and is also prohibitive for those looking for a step up the property ladder . The time has come to re-assess Britain's most unpopular tax."
Whilst we cannot agree that it its the most unpopular tax (recent surveys show 31% of respondents take the most displeasure in paying inheritance tax, compared to a mere 23% loathing Stamp Duty) however we support their call for an extension to the raised threshold as in the current market conditions, all stops should be pulled in efforts to draw in first time buyers, life blood, into the market.