January 2012

A leading national newspaper highlighted this week that homeowners are enjoying the cheapest mortgages on record, thanks to historically low interest rates.

The average mortgage payment is currently £494 per month, which compares to £601 at the height of the credit crunch some 4 years ago. In terms of affordability, the current figure represents 15.4% of average take home pay compared to 20.5% in 2008.

The number of first time buyers also increased markedly last year compared to 2010 as banks relaxed some of their lending restrictions; there were 57,301 loans of 85% or more, up from 43,379 in the previous 12 months.

It is expected that interest rates will remain at 0.5% (now 34 consecutive months) for some time to come, as the Government attempts to help support the economy via quantitative easing and other financial instruments.

For potential vendors, this represents a valuable window of opportunity to secure highly favourable mortgage deals which may look very cheap in the years ahead. A number of lenders actually cut their interest rates in 2011 as they battled for share in an increasingly competitive market, but this will not last forever.

Mortgage rationing, a significant minimum deposit, and a good personal credit history remain key to securing the best deals. But for those that can pass these hurdles, the offers are extremely attractive by any financial measure.

So the message is: "if you wait for the perfect house, at the ideal price, with the lowest possible financing costs, with good weather, and when the economic outlook is favourable – then you may just never make the move". The children grow up, personal circumstances and requirements change, and your home is integral to this journey.

We have seen a strong start to 2012 in terms of enquiries, as the public maybe realise that the current opportunity is just too good to let pass. Now might just be the best time to take a small risk and get on with your life – which is surely the biggest reward of all.

Myles T Tydeman MNAEA Managing Director of Tydemans Estate Agents in Lichfield & Barton under Needwood.