Whole of Market Mortgage Advice

Getting life insurance is a way to prepare for the worst and to protect what matters most to you. Workers in the UK are facing a ‘life insurance equality gap’, according to research*. The life insurer’s survey reveals just 50% of salaried workers have taken out life insurance, while just 33% of non-salaried workers, including self-employed, freelancers and workers on zero-hour contracts, have life cover in place. Why is life insurance important? Life insurance can help your family feel financially secure when they need it most. The payout can cover essential costs, such as a mortgage, rent, household bills, or education. It also helps settle outstanding debts, so loved ones aren’t left overwhelmed with demands for money. And for those with larger estates, it can also be a valuable estate planning tool, as life insurance payouts are typically Inheritance Tax-free, ensuring your beneficiaries receive the full benefit without deductions. Is life insurance too expensive? Despite its importance, many people delay purchasing life insurance, often assuming it’s too expensive. The survey found 25% of non-salaried workers and 19% of salaried workers cited high costs for not having life cover. However, this misconception needs to be challenged, as in most cases, policies start from just a few pounds a month, offering substantial protection at a relatively low cost. Peace of mind included Beyond its practical benefits, life insurance provides peace of mind, ensuring families will be supported through difficult times. According to the survey, nearly two-thirds (64%) of self-employed workers without life insurance were worried about lacking life insurance. Among these, 16% are worried their loved ones might struggle to cover funeral expenses. Additionally, 14% fear their family could be burdened with debts like loans or mortgages, while another 14% are concerned that their family’s quality of life would decline if they were to pass away. Ryan Griffin, Beagle Street’s Director of Protection, said, “It’s vital that everyone who could benefit from having life insurance, can access it. Not only this, but there must be affordable and accessible options that work for people and their families. Advisers play a key role in helping people find the protection that suits their needs and we value the support they give to those looking for cover that is right for them.” Planning for the worst is never easy, but it’s necessary to secure your family’s financial future. Life insurance provides a simple and effective way to make lasting plans that ensure your loved ones get the financial support they deserve. As with all insurance policies, conditions and exclusions will apply *Beagle Street

UK mortgage rates in the spotlight as economic factors suggest rates could rise again. Hopes that the Bank of England would significantly lower interest rates in 2025, leading to cheaper mortgages, now seem less likely, thanks to global bond market sell-offs and Labour’s Budget leading to a surge in borrowing costs. These factors have unsettled debt markets and contributed to higher interest rate expectations. As a result, borrowers face a more uncertain outlook. As a reminder, the Bank of England opted to hold Bank Rate at 4.75% in December. However, since then, a sharp increase in UK government bond (gilt) yields has pressured rates. Market predictions suggest Bank Rate could fall to 4% by the end of 2025, with some analysts anticipating cuts to as low as 2.75%. However, the volatility in the bond market makes those predictions look optimistic. What can borrowers do? With bond market volatility set to continue, borrowers should seek professional financial advice before making any decisions. A financial adviser can help navigate the complexities of rate changes and determine whether to fix a mortgage deal or wait for lower rates in future. Your home may be repossessed if you do not keep up repayments on your mortgage

The Office for National Statistics (ONS) reported UK house prices increased by an average of £10,000 in the year to October 2024. The report showed the value of a typical home to be an estimated £292,000, an annual increase of 3.4% compared to £282,000 recorded in October 2023.  In England the average house price increased by 3% year-on-year to £309,000. The highest regional increase was in Northern Ireland, where prices rose by 6.2% to £191,000. In Scotland, prices rose by 5.5% to £197,000, while in Wales there was a 4% increase to average house prices to £222,000. However, monthly, property prices fell on average. In London, average property values were £7,000 lower between September and October, taking average prices in the capital down from £531,000 in August to £520,000 in October.

A new survey from the Environment Agency suggests one in four properties in England are in areas at risk of flooding and could become ‘overwhelmed’ from a combination of rivers, the sea or surface water. The Environment Agency surveyed 25 million homes in England to assess their flood risk. It believes 4.6 million properties are in danger of flooding from surface water, an increase of 43% from its previous assessment in 2018. Surface water is rainwater that fails to drain away, either because of heavy rainfall, saturated ground, or overwhelmed drainage systems and leads to flash flooding that can occur in just minutes. While the report suggests 6.3 million homes currently face flooding risks, climate change could increase the total number to around 8 million by 2050.

Bank of England (BoE) Governor Andrew Bailey is confident inflation will fade in 2025, which could mean as many as four interest rate cuts over the year. Bailey told the Financial Times in December that despite recent higher points, he still expected inflation to return to the Bank’s 2.0% target, creating headroom for four 0.25% rate cuts throughout 2025. Bailey noted that while several different inflation scenarios were possible, the latest monetary policy report noted that the Bank would pursue a path of “gradual” interest rate reductions. If his forecast proves correct, it would push Bank Rate down from 4.75% to 3.75% over the next 12 months. What could this mean for mortgage borrowers? For homeowners on tracker mortgages, which track the UK Bank Rate, each rate cut will see their mortgage rate reduced. Mortgage holders with a variable rate mortgage can expect their lenders to cut rates more gradually, with cuts likely to vary from lender to lender and based on a number of different criteria aside from Bank Rate decisions. Anyone with a fixed rate mortgage, but particularly those whose term ends within the next year, will be more hopeful they can refinance at a more comfortable rate. However, it’s worth noting that fixed mortgage rates anticipate interest rate changes, rather than respond to them. This means expected Bank of England rate cuts are already factored into current rate pricing. As a result, the cheapest five-year fixed rates are slightly above 4%, instead of being more closely tied to the Bank Rate. If the market expects rates to drop to 3.75% by the end of 2025, rather than 4.0%, there could be potential for further mortgage rate reductions. What if the Governor’s predictions fall short? Andrew Bailey’s statement highlights that the outlook for the UK economy is still uncertain and while inflation should move closer to target, there are many unknowns that could derail the prospect of four rate cuts this year. It’s also worth noting that despite Bailey’s assertions, market expectations for interest rate cuts have been shifting recently. Before the October Budget, markets expected six to seven rate cuts over the next year, but this dropped to two to three cuts after the Budget, as some measures – including increased borrowing and higher spending commitments – were viewed as inflationary. Given these dynamics, the future trajectory of interest rates remains hard to predict. That said, further positive comments from Andrew Bailey may encourage a downward trend in rates. For those considering fixed-rate options, acting sooner rather than later may be prudent to secure favourable terms. Your home may be repossessed if you do not keep up repayments on your mortgage