Now that the housing market is showing clear signs of improvement, especially in the South and London, more homeowners are taking out mortgages for more than GBP500,000. See "Latest Market Facts" at the end of this article for more information.
Before, lenders had mixed feelings about people who wanted to take out one of these mega mortgages. Sometimes they would give them the money, but they saw the person as a higher risk. Because of this, most lenders charged a high rate of interest. But no longer. Things have changed.
Mega mortgages are now very common, and lenders are fighting hard to get their business. Instead of having to pay a higher rate, borrowers are getting deals that are about a quarter of a percent less than similar deals for mortgages that aren't as big. This is because lenders are putting less weight on the security provided by the property and putting more weight on how much the borrower can afford to pay for the mortgage. The fact that interest rates stay low also helps.
If you're interested in getting a mega mortgage, you'll find that banks are usually the most helpful. When it comes to mortgages, banks tend to have higher lending limits than building societies and other types of mortgage lenders. Some smaller lenders still have a limit of GBP500,000, and others have limits on how much they will lend against a single property. But a specialist mortgage broker might be the best way to find a really good mega mortgage at a good price. In the current market, any good broker will be able to find a great deal on a mortgage for six or seven figures.
For example, the Halifax will lend up to 90% on mortgages up to GBP2 million with a fixed rate of 4.49 percent for two years. And the fee to set it up is only GBP499. If you have a larger deposit, at least 25%, there are a few other deals at 3.99%. Again, this is for a two-year fixed rate, and the fee is usually less than 0.25%.
The newest information about the housing market
In March, the average price that was paid was 94% of what was asked.
The average number of sales for each number of views was 11.
In March, house prices in England and Wales went up by 0.5%, which was mostly due to a strong market in London. Prices in London went up by 1.1%.
This is the fourth month in a row that home prices have gone up. It's also the biggest increase in a single month since the summer of 2004.
Over the past year, house prices have gone up by 0.1%.
There are a number of things that affect how well the London market does:
There aren't enough new homes coming on the market.
In the last few years, London's house prices haven't grown as fast as they could have. Because of this, incomes and house prices are more similar in the capital than in other areas.
In other parts of England and Wales, it is still hard to get by on a low income.
Prices have gone up in places outside of London, mostly in cities in the South of England. Berkshire (with 0.7%) and East Sussex (with 0.6%) did well.
Prices went up more slowly in cities in the North. Newcastle, Liverpool, and Manchester all saw price increases of only 0.1%.
Derbyshire (-0.1%) and the Isle of Wight were the counties that did the worst (-0.1 percent ).
Central London & City (1.9%), East London (1.4%), North London (1.2%), West London (1.2%), South-West London (1.0%), and South-East London (1.1%) were the places in London with the highest increases in March (0.8 percent ).
In March, the average price of a house across the country was GBP162,500.
