As some of you may know, Enness was founded back in 2007. On the very day of our launch party, the run on Northern Rock happened and the market ground to a halt. Luckily, the only way was up; we have gone from strength to strength since then. All this is to say that, when it comes to financial crises, we have a lot of experience – and expertise – to offer to UK and international buyers, sellers, investors and developers. Below are our top tips for the coming weeks and months.
- Make sure you secure your family home. You can do this by considering a slightly longer timeframe on a loan to make sure you are protected from having to refinance in a potentially tough lending market. Instead, look to stretch the short-term to a five-year period and don’t forget to plan for things like your children’s schooling or your retirement.
- Fixed rates are low, but the cost of fixing, and accompanying loss of flexibility, can sometimes be high. Make sure you consider all options, including split loans, caps, and easy switch products, before you jump straight into a five-year plan.
- Interest only is a key product but it’s worth considering whether you can use it to protect your cash flow position. Remember, there are more products available now than there have been for quite a while.
- Plan for opportunity; for example, in 2007, we saw a tiny window of low activity before the smart money moved in. Can you use the equity in your home or other property holdings to react to good investment opportunities as and when they present themselves? Flexible positions, offset, and hunt funds are also all available. Brexit or not, the UK still has a significant housing deficit.
- Consider your structure – is your current property holding structure robust enough and are your other assets secured? Do you have cash-backed, or Lombard lending (which has a currency risk attached)? A review of whatever structure you have in place is wise at this stage to check it is still the most appropriate option for you.
- Stay informed. We are in a state of flux right now. In terms of interest rates, for instance, the Bank of England’s current thinking is that a recession is the biggest threat; pundits are suggesting interest rates could be at zero by 2017. Watch this space…
Our most important piece of advice is to act now. Lending appetite, liquidity, and product choice are currently very high and we simply don’t know what is around the corner. At Enness, we are available to assist with any planning, or contingency planning, as owners and potential buyers alike look to move forward.