Well no change again in this month’s bank base rate, and no surprise there. But one of the big questions at the moment is, are whether property prices are going up or going down? It seems almost pointless reporting it sometimes. Last week, Nationwide said prices were up 0.9% and this week Halifax reported price falls of 0.5%.

I’m not sure if anyone knows completely why the two indexes are different, however there is some definite common ground. The shared view is that even though we may not be quite at the bottom of the market, prices are more stable and that gives increased confidence that the worst may be over.

Of course, if you are buying at the moment that may not necessarily be ideal news – but don’t shoot the messenger! I will always give it to you straight.

The second bit of news this week was from the Bank of England Credit Conditions Survey. They revealed that the supply of mortgage finance is slowly improving with lenders expecting to make credit more readily available over the next 3 months.

Residential Mortgages – why not use them?

Although buy to let mortgages are quite static at the moment, there’s definitely more life in the residential mortgage market. Rates and arrangement fees are considerably lower than buy to let and its certainly worth considering using this to your advantage, where possible.

Take an example where you have an residential property with a small mortgage. If you want to buy an investment property mortgage rather than simply going for a buy to let mortgage consider remortgaging your residential property (subject to status of course) and buying the other property for cash. If you can’t raise enough outright, at the very least you could raise more deposit money so you can get a lower loan to value buy to let mortgage, which often means you have more choice. You can also offset the interest on the residential mortgage against the income of the buy to let, so reducing a possible 40% tax exposure.

Residential mortgage rates start from below 4% and for remortgages you can secure a free valuation and legal fees package.

If you would like more details on how this strategy is currently working with many of our investors, then give us a call.