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Bank of EnglandThe Bank of England has held UK interest rates at a record low of 0.5% for another month.

The quantitative easing programme is unchanged at £375bn.

Rates have been at 0.5% for five years, but as the economy recovers there are expectations of a rise early next year.

Last month, minutes of the Bank’s interest rate meeting in early August showed that two policymakers voted for a rise.

This was the first time in three years that rate-setters on the Bank’s nine-member Monetary Policy Committee (MPC) had done so.

Minutes of the latest MPC meeting are due to be published next week.

Bank governor Mark Carney has made clear that any rate rises would be small and gradual.

Bank of EnglandUK interest rates held at record low of 0.5% for another month

UK interest rates have been at 0.5% for five years. However, in June, Mr Carney said that interest rates could start to rise sooner than financial markets expected.

The size of the Bank’s economic stimulus programme – quantitative easing – was also unchanged at £375bn.

Debate over the timing of a rate rise has intensified, with Bank governor Mark Carney hinting recently that it could come by the end of this year.

In the minutes of the previous MPC meeting in July, all nine members of the committee voted to keep rates on hold.

Details of why the Bank’s Monetary Policy Committee (MPC) held rates will be published later this month.

The minutes for the latest MPC meeting are not due to be released until 20 August. If they reveal that some policymakers voted in favour of a rate rise it will be the first time the committee has been split since July 2011.

BOEThe Bank of England’s Monetary Policy Committee has once again voted to keep base rate at 0.5 per cent, the 61st month of record-low rates. The MPC also voted to keep its programme of quantitative easing at £375bn.

The previous change in Bank Rate was a reduction of 0.5 percentage points to 0.5% on 5 March 2009. A programme of asset purchases financed by the issuance of central bank reserves was initiated on 5 March 2009. The previous change in the size of that programme was an increase of £50 billion to a total of £375 billion on 5 July 2012.

Bank of EnglandToday UK interest rates have been held at 0.5% for another month, the Bank of England has said.

The decision by the Bank’s Monetary Policy Committee comes five years after the record low level was first introduced.

It is the first rate decision since the bank amended its “forward guidance” policy that linked borrowing rates to unemployment figures.

Rates are unlikely to rise before the spring of 2015, analysts believe.

The Bank also kept its £375bn quantitative easing (QE) programme unchanged.

The half-decade of ultra-low interest rates has seen returns on savings hammered, while mortgage borrowers have reaped the benefits of lower repayments.

Help to BuyEquity loans taken out under the Help to Buy scheme since its inception have reached a total value of £600m, government figures have revealed.

Since the scheme launched in April 2013 14,823 equity loans have completed to the end of January, 89% of which were for first-time buyers.

Leeds topped the table as the council which completed the most purchases with 268.

The Help to Buy equity loan scheme can be used to purchase a new build property up to the value of £600,000 with a 20% equity loan up to a maximum of £120,000.

The government has set aside a pot of £3.5bn to service the equity loan scheme.

The availability of a government loan to purchase a new build home helped to drive up house building activity last year.

Planning permissions granted in 2013 reached their highest level since 2007 climbing to 174,471, a report from the House Builders Federation showed.

The report revealed the scheme was delivering around 2500 reservations a month.

But despite the upward trend, the 2013 total figure is still short of meeting the country’s annual housing demands.

The Office of National Statistics predicted that 232,000 households are projected to form each year.

Stewart Baseley, executive chairman of the HBF, said: “Help to Buy equity loan is increasing demand for new homes and the industry is increasing its output as a result.

House prices rising at fastest rate for four years

House prices rose by 0.6% in February, a 9.4% increase on the same month in 2013, according to the Nationwide Building Society.

The annual rate of growth is the fastest for almost four years.

It puts the average price of a UK home at £177,846, which is still almost 5% below the 2007 peak.

The Nationwide said sales and prices were being driven by record low interest rates, higher employment and the easier availability of mortgages.

The lender’s chief economist, Robert Gardner, acknowledged that prices could accelerate even faster in the coming months, as more people took the plunge to buy for the first time or move. But he denied a house price “bubble” was being created.

“If you look at prices relative to earnings then housing does look relatively expensive by historic standards,” Mr Gardner told BBC News.

“But if you look at how much it costs to service a typical mortgage, that suggests that housing isn’t overly expensive at this point… because interest rates are at such low levels.”

The Nationwide pointed out that prices were also being driven higher by a continued lack of new homes.

“Price growth is being supported by the fact that the supply of housing remains constrained, with housing completions still well below their pre-crisis levels,” said Mr Gardner.

He added that just 109,500 new homes were built in England in 2013, which was 38% below the level recorded in 2007, and about half the projected number of new households expected to form each year.

5 year fixedWith the UK economy growing faster than expected this could push forward the first base rate hike by as much as 12 months, economic forecasters say.

Borrowers considering taking out a five-year fixed should consider this sooner rather than later as anticipation of a rate hike grows.

There is a one in five chance that unemployment could fall to 7% in the first half of next year, which is one of Bank of England governor Mark Carney’s trigger points for hiking base rates from today’s 0.5%, according to the National Institute of Economic and Social Research.

But it admits there is “considerable uncertainty” about the rate at which unemployment will fall. Its best guess is that the level could get 7.4% by the middle of next year, down from today’s 7.7%.

Some are forecasting a rise in interest rates in the second half of 2015.

For a personal quotation, please call us on 01489 580020 or contact us today where a qualified adviser can discuss your financial requirements.

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imagesCAU3ZMDP90% First time buyers

A two-year fix for first-time buyers available at 4.49% up to 90% LTV or a  two-year fixed rate at 3.79% up to 85% LTV to all homebuyers and remortgagers.

For further details on 85% or 90% deals call us on 01489 580020 or email us at quotes@parkgate.net where we would be more than happy to provide you with a personal illustration.

Help to Buy

Help to Buy – Equity loans

The Help to Buy equity loan scheme gives you the opportunity to purchase a new build home with the help of an equity loan guaranteed by the government.

with hep to buy you purchase a minimum 80% equity share and, as part of that, you’ll need to be able to provide a deposit of at least 5% of the property value from savings or from some other source (like a gift from a relative).

An equity loan of up to 20% of the property value will be provided through Help to Buy. It’s interest-free for 5 years. After that, you pay an annual fee of 1.75% on the amount of the outstanding loan. The fee will increase each year by inflation (Retail Price Index (RPI)) + 1%.

You can start repaying the equity loan after you’ve owned the home for a year, but you’ll need to be able to pay a minimum of 10% of the property value at the time of repayment.

When you want to sell your home, you’ll need to repay the percentage equity loan that is still outstanding. So, for example, if you originally bought 80% of the property and you hadn’t repaid any of your equity loan, your repayment on selling would be 20% of the market value at the time when you sell.

For further details on Help to Buy please call park gate on 01489 580020 or email us at quotes@parkgate.net with your requirements

 

custemer feedbackAs first time buyers, we were basically going into the unknown! But Kevin was absolutely brilliant and guided us through the entire process. He answered all emails very quickly and gave us email updates all the time too. All in all, a great service and would definitely come back to you guys in the future!

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We offer whole of market advice for all types of customers, whether you are a first time buyer, home mover or looking to purchase a buy to let property. Being independent we are able to offer impartial advice from the whole of the market to ensure you get the product that suits your financial needs.

Whether you are looking to protect your mortgage payments or your family, we provide independent advice for life insurance, critical illness cover and income protection from a wide range of providers.

Buildings Insurance is a requirement when you complete on a mortgage the cover is to provide security to the lender, the insurance covers the main structure of your home. It will cover you for subsidence, storm, flood, fire or smoke damage and cover the costs of rebuilding or repair.

Equity release is a way of releasing cash from your property, either through selling a percentage to the reversion company or taking a mortgage on it, while allowing you, the homeowner to continue living there as long as you wish.