Money website says BUY NOW!

MSE_Martin

I thought you'd enjoy this.

I was rather surprised to see a press release from love money the personal finance site spun off from the fool - going hell for leather in favour of buying property.

Its something I've always hedged away from - as I dont think you can ever know you can only ever guess / assume. I think its a brave move even if its right.

Anyway here's its release.

Now is a great time to buy that property, says lovemoney.com

The UK’s prolonged recession isn’t bad news for everyone. With providers like Northern Rock cutting mortgage rates, now is a good time to buy property, according to lovemoney.com

Ed Bowsher, head of consumer finance at lovemoney.com explains: “On Friday we learned that the UK hasn’t crawled its way out of recession as predicted. That’s depressing for many of us but it could actually be good news for people looking to buy a property.”

“The UK’s rotten economic performance means that interest rates will probably stay low in 2010, so most people can afford to take the risk of a variable rate mortgage. If you’re purchasing a house and have a 30 per cent deposit, you can get a two year tracker mortgage from Northern Rock at 2.69 per cent*. That’s a cracking rate and even if the base rate goes to 1.5 per cent, you’ll still only be paying 3.69 per cent.

“For anyone with a 30 per cent deposit, Northern Rock’s rate is almost matched by the Woolwich where you can get a lifetime tracker for 2.79 per cent**. The nice thing about this mortgage is that it’s a lifetime tracker, so if the base rate stays low for many years to come, you can benefit. And if the base rate takes off much sooner than I expect, you can still exit the deal relatively cheaply as the early repayment charge is only 1 per cent***.

“The mortgage market has come back to life since the summer. Good old-fashioned competition has triggered attractive deals from the likes of Woolwich, Abbey, HSBC as well as Northern Rock’s very welcome cut today. Let’s hope the mortgage battle isn’t over and more cuts will come.”

-Ends-

Notes to editors

* Base + 2.19% and £595 fee.

**Base + 2.29% and £999 fee.

***until January 2012

Northern Rock is offering 2.75% to remortgage customers.

mbga9pgf

+2.19 is still hideously expensive historically. Great when rates are 0.5%, not so great when rates head up to past 5%, even if its in 10 years time.... Anyone hoping for bumper pay rises over the next decade are simply delluding themselves.

JonnyBravo

I'd argue that a 2.19% margin isn't historically "hideously expensive". Sure it is compared to recent history but much of what went on in recent history in the banking world wasn't sustainable.

As for the pay rises bit, you mean unless they get a promotion? People do still get promoted you know. Even without exceptional performance, people at the top do retire and even average performers can move along in their careers.

ruggedtoast

Fingers crossed - I'm off house hunting today anyway.

Davesnave

I can't see us buying another property, but I came to a similar conclusion about interest rates and fixed our additional funds at 4.25% last week.

Generali

MSE_Martin wrote: »

I thought you'd enjoy this.

I was rather surprised to see a press release from love money the personal finance site spun off from the fool - going hell for leather in favour of buying property.

Its something I've always hedged away from - as I dont think you can ever know you can only ever guess / assume. I think its a brave move even if its right.

Anyway here's its release.

Now is a great time to buy that property, says lovemoney.com

The UK’s prolonged recession isn’t bad news for everyone. With providers like Northern Rock cutting mortgage rates, now is a good time to buy property, according to lovemoney.com

Ed Bowsher, head of consumer finance at lovemoney.com explains: “On Friday we learned that the UK hasn’t crawled its way out of recession as predicted. That’s depressing for many of us but it could actually be good news for people looking to buy a property.”

“The UK’s rotten economic performance means that interest rates will probably stay low in 2010, so most people can afford to take the risk of a variable rate mortgage. If you’re purchasing a house and have a 30 per cent deposit, you can get a two year tracker mortgage from Northern Rock at 2.69 per cent*. That’s a cracking rate and even if the base rate goes to 1.5 per cent, you’ll still only be paying 3.69 per cent.

“For anyone with a 30 per cent deposit, Northern Rock’s rate is almost matched by the Woolwich where you can get a lifetime tracker for 2.79 per cent**. The nice thing about this mortgage is that it’s a lifetime tracker, so if the base rate stays low for many years to come, you can benefit. And if the base rate takes off much sooner than I expect, you can still exit the deal relatively cheaply as the early repayment charge is only 1 per cent***.

“The mortgage market has come back to life since the summer. Good old-fashioned competition has triggered attractive deals from the likes of Woolwich, Abbey, HSBC as well as Northern Rock’s very welcome cut today. Let’s hope the mortgage battle isn’t over and more cuts will come.”

-Ends-

Notes to editors

* Base + 2.19% and £595 fee.

**Base + 2.29% and £999 fee.

***until January 2012

Northern Rock is offering 2.75% to remortgage customers.

It's a particularly interesting piece given that one of their main writers sold his house with the idea of buying back the same house or similar at a lower price in 2003.

The Fool is a really good site I think, as good as MSE but in a different way.

michaels

The fool / love money certainly surpass MSE by far in the spam generation stakes...

Feb would almost certainly have been a much better time to buy with cheaper long fixes and lower prices.

Many on here are not convinced that the 'every cloud has a silver lining' theory of low growth = low rates is not putting the cart before the horse. The weak economy that low rates implies will also no doubt lead to job loss and people struggling to pay their mortgages (however cheap) which could lead to further downrd pressure on prices - and in general price changes have more impact on the financial implications of investment in property than interest costs.

How is the fools track record on predicting house prices and interest rates?!

Generali wrote: »

It's a particularly interesting piece given that one of their main writers sold his house with the idea of buying back the same house or similar at a lower price in 2003.

The Fool is a really good site I think, as good as MSE but in a different way.

kabayiri

I have a question about this (ish!)

Suppose, you knew someone with a house who had lost their job; spent their redundancy money; and were likely to lose the house at some point in the future.

If you bought the house off them, would they be allowed to continue living in that house as a tennant? And...would their rent be paid for by the state?

I'm not looking at this as a cash cow, more a way of helping someone out whilst at the same time securing a moderate longer term investment..

HAMISH_MCTAVISH

kabayiri wrote: »

I have a question about this (ish!)

Suppose, you knew someone with a house who had lost their job; spent their redundancy money; and were likely to lose the house at some point in the future.

If you bought the house off them, would they be allowed to continue living in that house as a tennant? And...would their rent be paid for by the state?

I'm not looking at this as a cash cow, more a way of helping someone out whilst at the same time securing a moderate longer term investment..

Too many variables to answer.

In general terms, never get involved in big financial commitments with friends though.

It's a good way to lose both your money and a friendship.

kabayiri

HAMISH_MCTAVISH wrote: »

In general terms, never get involved in big financial commitments with friends though.

It's a good way to lose both your money and a friendship.

This is a very good point.....time to reconsider

StevieJ

Generali wrote: »

It's a particularly interesting piece given that one of their main writers sold his house with the idea of buying back the same house or similar at a lower price in 2003.

The Fool is a really good site I think, as good as MSE but in a different way.

That would be not so Cunning Cliff D'arcy I believe :eek: