• Sterling crisis could drive up interest rates
• First time buyers are the largest buyer group in the country but they’re about to be hit with higher interest rates. Here’s what’s happening and how you can offset the rising rates.

Key takeaways

• First time buyers, the largest buyer group in the UK with nearly 177,000 transactions so far in 2022, will need an average of £12,250 more on their income to get a mortgage based on 4% interest rates 
• A whopping £34,500 extra is needed in the London market, but less than £5,000 in more affordable regions
• Property interest among FTBs is up by 46% year on year as they drive the market from the bottom up.
• More than half of their enquiries for three bedroom homes and an average price 10% higher than this time last year (£269,000).
• FTBs are looking further afield in cheaper areas to buy a home, meaning less time spent saving up for a deposit.
• Zoopla data shows that 25% of first time buyers outside of London are now searching 10km or more from their home address.  Source: Zoopla

Is it still cheaper to buy than rent?

Comparing the cost of renting and buying, Zoopla examined whether a renter can afford to buy the home they live in.

You would save an average of £200 by paying a mortgage (with a 2.5% rate) rather than renting.

On a 4% interest rate, it’ll still be slightly cheaper to pay a mortgage than to rent in most places.

But buying will edge into being more expensive than renting in the high value areas of London and the South of England.

5 Tips To Help First Time Buyers:

1. Broaden your search area

Obvious, but makes sense if you rent in a city centre.

2. Use a government buying scheme

The government has launched several first-time buyer schemes to help you get on the property ladder.

The Help to Buy Equity Loan scheme is a popular choice but ends in October. 

The First Homes scheme offers discounts of between 30% and 50% on new build properties to local first-time buyers and key workers.

There are several other schemes that can help you get on the ladder too.

3. Team up with friends or family to get a bigger deposit

Offset rate rises by coming up with a bigger deposit.

Many are turning to family members or pairing up with partners or friends to get a deposit together.

Use the available ISAs and tax free savings schemes to save for a deposit.

Many parents and grandparents use ‘equity release’ schemes to help fund a deposit.

4. Do your homework on different types of mortgages

Learn how different types of mortgages are impacted by base rate changes.

Speak to a mortgage advisor. Some specialise in first time buyer mortgages, so tap into their knowledge as well as doing your own research.

5. Keep up with your local market

Local housing markets all different to the national picture and you’ll be in the best position to get on the market at a good price if you know what’s happening nearby.

Sterling crisis could drive up interest rates

Interest rates and inflation could soar if the Pound continues to fall against the Dollar.

Goldman Sachs predict that inflation could reach 20%!

Energy will rise again next month, food prices are rising at more than 10% and unions are striking for higher pay deals and some want to minimum wage to go up to £15 per hour.

Germany now has the highest inflation rate for 40 years.

To help you get through this and come out stronger at the other end I have prepared a brand-new training, which you can access right now from the comfort of your home.

Check out my new training to help you get control of your finances and learn how to become financially free in 28 days!

Click to join: https://bit.ly/3isugCr

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Following the Queen’s funeral, it is time to get back to the reality of the crisis we are facing in the UK.

UK interest rates set to rise again this week by the biggest margin in 33 years, as pound slides against the US dollar. Sterling has fallen to a 37 year low against the US dollar, the reserve currency of the world. 

This means that the UK is paying 15-20% more for imports, such as oil, on top of all the other factors causing prices to rise at the fastest rate since the early 80s. 

More misery than expected for mortgage holders when the Bank of England monetary policy committee meets this week (following a delay for the Queen’s period of mourning) to set UK base interest rates. The new Chancellor Kwasi Kwarteng will announce his first mini-budget on Friday.

Rates could rise by at least 0.5%-0.75% or even 1% this week. A 0.75% hike would mean that the average mortgage holder, with a loan of £138,000, will be paying an additional £728per annum (based on a variable rate loan).

Whilst most mortgage holders have a fixed rate mortgage, when these deals come to an end, borrowers will suffer a steep rise in monthly payments.

The days of low interest rates and cheap borrowing have come to an end for the time being. 

The Federal reserve has been aggressively raising interest rates to come back inflation which has strengthened the dollar and weakened sterling and the euro.  

Higher interest rates means that buy-to-let investors taking out a mortgage will need to carefully examine the viability of rental properties based on increased loan repayments. Average yields will be hit by higher mortgage costs which have doubled in many cases. 

Mortgage lenders are already factoring in higher interest rates when calculating affordability and borrowing levels. Higher rates usually results in lower mortgage loans for borrowers.

Businesses borrowers also face huge additional costs on top of the cost of running the businesses with higher oil and power prices. Insolvencies in England and Wales are up as thousands of businesses go to the wall.

Higher interest rates and tighter monetary policies, designed to control inflation, will cause the worldwide economy to slow down.

Unfortunately, low paid workers and small businesses get hit hardest as if you can survive very long during a recession.  

In the last 10 years, consumers have taken on enormous amounts of cheap and plentiful debt on their homes, as well as to purchase luxury items such as cars, boats and recreational vehicles.

This is all very well as long as they have income to service the debt when income slowdown people get into trouble and business for debt collectors and bailiffs starts the boom.

Expect to see more repossessions of homes and cars next year.

In my S.M.A.R.T money course, I always stress that borrowing to buy consumer goods - which go down in value - is a bad idea.  

Now is the time to prepare for the economic winter ahead.

Get your house in order and fasten your seatbelts for a rough ride ahead. 

When times are good, and borrowing is cheap everyone buys more on credit and the economy expends. But the cycle never lasts, as we cannot keep on borrowing and creating money out of thin air forever…It hasn’t worked in the past and it will not work now.

The party is over!

Inflation is running out of control, which means the central banks will have to tighten monetary policy and pull back the reins on the economy – slow down the economy causing a recession. 

Now is the time to learn how to manage your money and prepare for the financial winter.

• Do you have any savings?
• Do you know how to invest or where to invest your money to build financial freedom?
• For how long could you pay your bills if you lost your job?
• Are you fed up struggling?

What can you do transform your finances and become financially free?

To help you get through this and come out stronger at the other end I have prepared a brand-new training, which you can access right now from the comfort of your home.

Claim your free Wealth Accelerator Discovery Call with me:

https://calendly.com/charleskelly/wealth-accelerator-discovery-call

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UK regulator, OFCOM, has hiked the energy cap which means average UK household energy bills are set to rise by up to 80% from 1 October. 

The Government has announced that all households in England, Scotland and Wales will receive £400 to help with rising fuel bills this autumn. The payment will appear as a credit on your energy bill. Landlords who include utility bills in houses in multiple occupation will still be eligible for these payments. 

See also: 100,000 Join ‘Don’t Pay’ group 

YouTube episode -  https://youtu.be/L2yOcmIFxDw

The increased outgoings could also affect how much you will be able borrow to buy your home.

Here are some changes to mortgage affordability calculations made by lenders that you need to be aware of if you are applying for a mortgage home loan in the UK.

Recent changes means lenders will add another layer to mortgage affordability checks used to calculate how much they can lend to borrowers. In future, they will not just look at your income but will also take into account at all of your outgoings, which means you may not be able to borrow as much as you need. 

Lenders are expected to amend the rules for benefit claimants to allow them to have their benefit payments assessed as part of the mortgage application.  

House sales peak in July HMRC figures show but buyers are cautious

Following the recent Halifax report, official figures show that more homes were sold in the UK in July than in any other month this year, but agents report that buyers are showing more caution.

Due to cost-of-living pressures and lower mortgage advances, buyers are increasingly negotiating for a lower price.

HM Revenue and Customs data showed that 110,970 properties were sold in the UK during the month - the highest since September.

Consistent monthly sales of around 100,000 this year show that demand remains comparatively strong, but there are signs that the squeeze on budgets caused by rising prices and bills were having an effect.

Sales in July were still 33% higher than the same month last year and 7.2% higher than June, HMRC said.

Nathan Emerson, chief executive of the estate agents' trade body Propertymark, told the BBC: "These figures show the housing market remains stable with transactions up month-on-month, year-on-year and well above pre-pandemic levels.

"The cost of living is still rising and we are seeing evidence of buyers negotiating harder, bringing price increases down. But our data from member agents shows the demand remains strong and that there with not enough stock to go round with the number of new potential buyers seven times higher than new homes coming to the market."

US President Joe Biden is cancelling billions of dollars of federal student loans. 

Mr Biden has just announced he will cancel up to $10,000 (£8,500) in federal student loans for millions of Americans who earn less than $125,000 each year. The cost is expected to exceed $300 billion and further add to the multi-trillion dollar US debt mountain.

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The economy is in winter, but winters are tough but they never last forever. Like the farmer who prepares for the next season’s work, now is the time get ready and come out even stronger when the recession ends.

To help you get through this and come out stronger at the other end I have prepared a brand-new training, which you can access right now from the comfort of your home.

Check out my new training to help you get control of your finances and learn how to become financially free in 28 days!

Click to join: https://bit.ly/3isugCr

#property #freetraining #propertysecrets #money #banks #savemoney #buytoletinvestor #propertyinvestor #energy bills #mortgages

See omnystudio.com/listener for privacy information.

Food costs are rising by over 14% which has helped push UK inflation into double digits for the first time since 1982. 

Prices are now rising at their fastest rate for more than 40 years.

Official inflation rates reach 10.1% in the 12 months to July, up from 9.4% in June, the Office for National Statistics (ONS) said.

Soaring living costs are eating into family household budgets, with prices rising faster than wages for the last decade.

The Bank of England has predicted that inflation will peak at 13% this year – having previously claimed it was “temporary” and would start to fall this year – and admitted that the country was heading towards a recession.

The price of energy, petrol and diesel costs are contributing to inflation, say the ONS, as well as staples such as bread, cereals, milk, cheese and eggs rising the fastest, while the cost of vegetables, meat and chocolate were also higher. 

In short, the cost of just about everything a family needs is going through the roof. But housing and mortgage costs are also hitting pockets, especially as fixed rate mortgages expire and cause a nasty shock when they jump in price.

What can you do to avoid the recession?

What will you do to survive and even thrive in this recession?

Here are my 7 inflation-busting tips:

1. Loyalty cards and money saving and rewards websites can save you thousands
2. Maximise your returns on savings and investments 
3. Clear credit card debts as fast as you can or transfer to interest free offers
4. Abandon ‘brand loyalty’ for better deals on similar products and services
5. Get control of your finances and stop spending more than you earn
6. EARN more, generate more cashflow with a side hustle or property business 
7. Invest in yourself, upgrade your skills and earning potential and power!

The economy is in winter, but winters are tough but they never last forever. Like the farmer who prepares for the next season’s work, now is the time get ready and come out even stronger when the recession ends.

To help you get through this and come out stronger at the other end I have prepared a brand-new training, which you can access right now from the comfort of your home.

Check out my new training to help you get control of your finances and learn how to become financially free in 28 days!

Click to join: https://bit.ly/3isugCr

#money #business #stockmarket #property #foodprices #freetraining #financialfreedom #inflation

See omnystudio.com/listener for privacy information.