The document discusses how the new Conservative government in the UK will impact mortgages in 2015. Key points include: 1) The Conservative government aims to build more homes to address the supply and demand imbalance in the housing market. Plans include building 200,000 starter homes and extending "Help to Buy" and "Right to Buy" schemes. 2) "Help to Buy" offers government contributions of up to £3,000 for first-time buyers saving for a deposit through an ISA. "Right to Buy" will be extended to allow social housing tenants to purchase homes at a discount. 3) Mortgage rates remain very low due to low inflation and Bank of England interest rates staying at 0

1. PUBLICATION OF BOUTIQUE FINANCE
HOW THE BRITISH
GOVERNMENT WILL
IMPACT MORTGAGES
IN 2015
BOUTIQUE FINANCE
FINANCE & PROTECTION TAILORED TO YOU

2. How the British Government Will Impact Mortgages in 2015 2
CONTENTS
04 Introduction
06 The Conservative Approach to Housing
08 Right to Buy
10 Help to Buy ISAs
12 How to Pick the Right Mortgage
14 Fixed Rate
15 Variable Rate
17 Remortgaging
19 A Positive Future?
20 Boutique Finance

3. How the British Government Will Impact Mortgages in 2015 3
“The Conservative majority
government has arguably
brought stability and optimism
to the UK property market.”

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INTRODUCTION TO MORTGAGES IN 2015
Despite widespread housing concerns in the run up to 2015’s general election, the
Conservative majority government has arguably brought stability and optimism to the
United Kingdom property market.
In fact, when news of the Conservative victory entered the public domain, homebuilders
and estate agents - like Barratt Developments and Foxtons - saw their shares soar in the
stockmarket.
The Bank of England also declared its confidence in the new government by, once again,
freezing the base rate to 0.5% - continuing to make borrowing a very attractive option to
mortgage buyers.
But this increased market confidence is arguably a sign of relief too. The Labour government
had proposed a Mansion Tax on properties worth £2 million or more - meaning that many
large-scale investors, particularly in London, felt wary about purchasing new properties.
These fears, however, have largley been erradicated since the majority government came
into power. Fixed-rate mortgages remain extremely good value for money. Nationwide’s Chief
Executive, Graham Beale, has publicly stated 2015 is likely to see Britain’s housing market
grow even stronger - as made evident by the increase in the value of saving deposits from
£458m to £2.9bn in one year.
The number of mortgages in serious arrears has also fallen to record levels since 2008.
With this in mind, this eBook aims to delve deeper in the UK property market and examine
exactly how the new Conservative government will impact mortgages in the next 12 months.
There will also be a strong focus on how buyers can leverage this new optimism to get the
best value mortgage deal. Regardless of whether they are a first-time buyer, or an experienced
veteran of the UK housing market.
1
http://www.ibtimes.co.uk/nationwide-profit-soars-1bn-chief-executive-graham-beale-announces-retirement-1502507
2
http://www.ft.com/cms/s/0/d49af806-fa33-11e4-a41c-00144feab7de.html#axzz3bEZ2OgfC

5. How the British Government Will Impact Mortgages in 2015 5
“The steady drop in oil prices has
kept inflation low and ensured
that the borrowing rate remains
at an extremely attractive level.”

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THE CONSERVATIVE APPROACH TO HOUSING
Following the Queen’s speech on 27 May, the Conservative party has outlined its plans for
tackling the UK housing crisis over the next four years:
■■ To build 200,000 new Starter Homes for first-time buyers
■■ To deliver an additional 275,000 homes by 2020
■■ To extend the Help to Buy scheme to 120,000 buyers
■■ To extend Right to Buy to social housing tenants
■■ To launch a new Right to Build scheme for local councils
These plans have been designed to alleviate arguably the most dangerous characteristic of
the UK’s housing market: an imbalance of supply and demand. Historically, the government
has failed to meet its ongoing housing construction targets since 2007 - when the economic
downturn placed increased strains on the Treasury’s resources (table 1).
The new Conservative government, however, aims to build 275,000 more homes than the
market currently requires - helping to bring down the average house price and make property
more affordable to buyers. David Cameron has also made it clear that this ongoing building
project will be funded, in part, by the selling off of social housing under the Right to Buy
scheme.
Although this balancing plan is certainly optimistic on paper, a key concern for many is
how long it will take for the government to sell off its social housing and then build more
properties. Without a rapid turnaround, arguably the disparity between supply and demand
could actually worsen.
Nevertheless, the Bank of England remains optimistic at this point of time. The steady
drop in oil prices has kept inflation low and ensured that the borrowing rate remains at an
extremely attractive level. So, for the foreseeable future, market stability and a commitment
to increased property building strongly suggests that these low rates will continue throughout
2015.
HOUSE BUILDING HAS FALLEN SHARPLY
Housing completions, England, 000s,
four quarter rolling total

7. How the British Government Will Impact Mortgages in 2015 7
“A policy that was first introduced
by Margaret Thatcher, Right to
Buy is part of David Cameron’s
plan to alleviate the ‘cycle
of renting’ that impacts
hundreds of thousands
throughout the UK.”

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RIGHT TO BUY
The Right to Buy has been one of the Conservatives most popular, but deeply divisive, policies
of the 2015 general election.
A policy that was first introduced by Margaret Thatcher, Right to Buy is part of David
Cameron’s plan to alleviate the ‘cycle of renting’ that impacts hundreds of thousands
throughout the UK.
As outlined in the Queen’s speech, Right to Buy will be extended to 1.3 million social housing
tenants. This will mean that British councils will sell off 200,000 of their best properties to
tenants, at a discounted rate, in order to fund cheaper property building in the future.
Overall, Right to Buy is welcome news to thousands of social housing occupants who would
like to purchase their home but have previously lacked the financial means. The housing
minister, Brandon Lewis, has stated that:
“Anyone who works hard and wants to get on the property ladder should have the opportunity
to do so, which is why the Queen’s speech will include measures so a million more people have
the chance to do that... we’ll take steps that will get workers on sites and keep the country
building.”
However, there is one potential downside to this renewed government scheme. Some property
experts fear that the selling off of social housing, without a solid commitment to build more
property quickly, will exacerbate the housing shortage problem. It could even drive up property
prices in the long term.
There is also concern about whether or not the social housing tenants will be able to afford
their homes in the first place. As a result of the Mortgage Market Review, mortgage lenders
have set in place a much stricter borrowing criteria for potential buyers. Even if some tenants
wish to buy their home, for example, they may not meet the Bank of England’s strict mortgage
rules. In this respect, there could still be some barriers in place before Right To Buy becomes
readily accessible throughout the UK.

9. How the British Government Will Impact Mortgages in 2015 9
“The number of mortgage deals
has increased by nearly 20%
in the last 12 months, offering
an unprecedented range of
options for buyers who want to
take advantage of this renewed
market prosperity”

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HELP TO BUY ISAs
If Right to Buy has created some uncertainty in the housing market, then Help to Buy has
certainly had the opposite effect. One of the benefits of stimulus package schemes, like Help
to Buy, is that they have helped renew confidence in the UK housing market - and encouraged
competition amongst lenders to offer the best possible deal. Some have even dubbed this
recent development as the ‘mortgage price war’.
The number of mortgage deals has increased by nearly 20% in the last 12 months, offering an
unprecedented range of options for buyers who want to take advantage of this renewed market
prosperity. The launch of the Bank of Ireland Intermediaries is also a testament to this growth -
indicating that more lenders are seeking to offer a competitive solution to market demands.
Consequently, good value mortgages are perhaps more available now than they have been for
8 years. This is particularly good news to those with small deposits, including savers who
have previously been turned down for a mortgage in the aftermath of the recession.
In terms of Help to Buy ISAs, potential buyers have the opportunity to take advantage of
attractive borrowing rates and also save money through the scheme. Each ISA member will
receive a maximum of £3,000 in government contributions, including:
■■ A 25% bonus on top of the saved deposit amount, e.g. £50 for every £200
■■ Saving up to £1,000 in the first month of your mortgage repayments, plus the bonus of £200
To qualify for Help to Buy, you will need to:
■■ Be a first-time buyer aged 16 or over
■■ Have saved a minimum of £1,600
■■ Be purchasing a home with the maximum value of £450,000 (London) or £250,000
(the rest of the UK)
It is worth keeping in mind that the government will contribute a maximum of £3,000 for
savings of £12,000. You also cannot contribute to a Help to Buy ISA if you already have
another cash ISA.
3
http://www.theguardian.com/business/2015/may/23/uk-mortgage-deals-jump-by-nearly-a-fifth-as-competition-heats-up

11. How the British Government Will Impact Mortgages in 2015 11
“An independent financial
advisor will be able to examine
your individual situation and
help determine which type
of mortgage will benefit you
the most.”

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HOW TO PICK THE RIGHT MORTGAGE
Whether you choose to take advantage of Help to Buy, Right to Buy, or the housing market’s improved borrowing rates, there is one decision that will impact everyone: which mortgage type to choose.
An independent financial advisor will be able to examine your individual situation and help determine which type of mortgage will benefit you the most:
PRO CON
FIXED
Consistent repayments for fixed time period
You won’t need to pay more even if rates increase
You can budget around your repayments
Your starting rate is likely to be high
If the rate drops, you will still pay the same
Early repayments will mean high penalty costs
TRACKER
You could enjoy consistently low base rates
The rate is dependent on the base rate, not lender
You can overpay without penalties
The base rate could rise, costing more per month
Insecurity in budgeting monthly payments
Early repayment fees if you want to leave
STANDARD VARIABLE RATE (SVR)
You could enjoy consistently low base rates
Potentially cheap mortgage repayments
Remortgaging can be easier
The base rate could rise, costing more per month
Insecurity in budgeting monthly payments
Little security
DISCOUNT RATE
The rate will always be lower than SVR
Low interest rates
No control over SVR, resulting in rate instability
Rate spikes after the deal ends

13. How the British Government Will Impact Mortgages in 2015 13
“In the next twelve months,
there is every reason to
believe that these l0w rates
will continue and buyers will
have an excellent opportunity
to purchase property at an
attractive rate.”

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FIXED RATE MORTGAGES
Fixed rate mortgages have always been an attractive option for buyers.
Whether it’s a two-year or five-year deal, this type of mortgage is an excellent option for
anyone who wants to lock in their repayments and have complete peace of mind throughout
the duration of their agreement. Moreover, in the past twelve months, fixed rate mortgages
have become especially favourable amongst those who want more than just consistency.
They also want to take advantage of low rates.
Thanks to low interest rates and a drop in wholesale funding costs, mortgage rates have
fallen significantly in 2015. Both two-year and five-year deals have hit record rate lows.
However, some of the biggest drops have actually been seen in four-year mortgage deals.
For example, in 2010 the lowest four-year fixed rate was 4.49%. Nowadays buyers can
expect to purchase the same mortgage for as little as 1.84%.
Nevertheless, this fortunate development doesn’t make two-year mortgages any less
attractive. According to Moneyfacts, the number of two-year fixed rate deals has increased
significantly in the last five years - from 596 to 1,993. There has also been a small rise in
the volume of five-year fixed mortgage types.
In the next twelve months, as inflation and oil prices remain low, there is every reason to
believe that these l0w rates will continue and buyers will have an excellent opportunity to
purchase fixed rate mortgages at an attractive rate.
What influences fixed mortgage rates:
■■ Inflation rate
■■ Expectation of future interest rates
■■ The “swap” rate at which banks can borrow money to lend to customers
If the swap rate isn’t good and money is expensive to buy, this will be reflected in the
fixed rate mortgages.
4
http://www.thisismoney.co.uk/money/mortgageshome/article-3088115/Four-year-fixed-rate-mortgage-deals-actually-dropped-most.html

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VARIABLE RATE MORTGAGES
It comes as little surprise that low mortgage costs have also impacted the popularity of
variable rate mortgages. Whether or not you choose a variable rate mortgage will depend
on a number of factors. The following guide contains impartial advice for anyone looking to
purchase a mortgage in 2015.
TRACKER MORTGAGES
■■ As long as base rates stay low, tracker mortgages will continue to have widespread appeal
amongst potential buyers. However, it’s worth keeping in mind that these rates could
change at any time - meaning that your repayments could become expensive in the future
■■ That’s why capped tracker mortgages, that limit your repayment amount, are good for
added peace of mind
■■ If you choose a tracker mortgage, you should budget for early redemption penalties in case
you wish to remortgage in the future
STANDARD VARIABLE RATE MORTGAGES (SVRS)
■■ Standard variable rate mortgages are default for borrowers who finish their fixed or
tracker agreement
■■ The main problem for homeowners is that the rate is subject to the lender -
e.g. the bank or building society - and thus can be difficult to budget for
■■ You could end up paying more than the Bank of England base rate
DISCOUNT RATE MORTGAGES
■■ Discount rate mortgages are cheaper than SVRs, but borrowers have no control over any
potential price hikes
■■ You are also likely to be subject to increased payments once the deal agreement ends

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“An independent financial
advisor will be able to offer you
impartial guidance and isolate
any alternative mortgage deals
that could have you money in
the long run.”

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REMORTGAGING
In addition to buying a mortgage, the increased optimism of the UK housing market has also
had a knock-on effect on remortgaging.
As a result of low borrowing costs, mortgage rates have dropped and in some cases are as
low as 1%. On the one hand, this is frustrating news for anyone who is on a SVR mortgage -
but is also an attractive prospect for anyone looking to remortgage their home.
There are generally two reasons why a homeowner would choose to remortgage their property:
■■ To take advantage of low mortgage rates from another lender
■■ To increase monthly repayments by finding another lender and avoid early
repayment penalties
Some of the best candidates for remortgaging include those who have little equity in their
property. If you are looking to repay your property in a quicker timeframe than previously
anticipated, then remortgaging could allow you to take advantage of low rates that were
previously unavailable.
In 2015, it is possible that homeowners who are approaching the end of their mortgage
agreement date will benefit from examining their options in light of recent market
developments. An independent financial advisor will be able to offer you impartial guidance
and isolate any alternative mortgage deals that could have you money in the long run.

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“With the Bank of England’s
base rate currently fixed at
0.5%, and low inflation, now
has never been a better time
to invest in a mortgage. ”

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A POSITIVE FUTURE?
The new government has taken significant steps to make homeownership a reality for millions
through the UK - such as extending Help to Buy and Right to Buy to more citizens than ever
before. David Cameron has also promised to build another 250,000 homes in the next five
years, which has the potential to drive down housing prices and make borrowing a mortgage
a much greater reality.
With this in mind, there is every reason to believe that 2015 will be a positive year for anyone
looking to purchase a mortgage or remortgage their home. All that matters is that you choose
the right option for you - and that’s the job of a mortgage broker.
SEEK EXPERT ADVICE
Choosing the right mortgage will be one of the most important decision you ever have to make.
An impartial mortgage advisor will be able to examine your financial situation and recommend
the very best option for you. Furthermore, with a portfolio of business connections throughout
the housing sector, a broker can provide you with a mortgage deal currently not available on
the market.
Quite simply, a mortgage advisor can help to take away the headache of financing your
perfect home.

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BOUTIQUE FINANCE
Saika has 22 years’ experience of the financial service industry.
In 1993 Saika joined Abbey National as a trainee independent financial advisor, before moving
to Bradford and Bingley in 1995 to work as a compliance officer. She spent a further 6 years
as a mortgage advisor working alongside one of the most respected figures in the mortgage
industry today.
In 2002 Saika joined MMG as a senior consultant staying until 2008 to build on her knowledge
and expertise. She quickly gained a reputation as an outstanding provider of mortgage advice.
In 2009 it was time to fly solo, and Boutique Finance was born.
CONTACT US TODAY
Tel: 0161 932 1479 (Manchester Office) | 020 7183 5393 (London Office)
Email: sa@boutiquefinance.co.uk | Twitter: @SA_boutique
Boutique Finance (Manchester)
Spinningfields, 10th Floor, 3 Hardman Street, Manchester M3 3HF
Boutique Finance (London)
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21. © 2015 All design and artwork contained in this document is the sole ownership of Boutique Finance.
Boutique Finance, Spinningfields, 10th Floor, 3 Hardman Street, Manchester, M3 3HF | See more at: www.boutiquefinance.co.uk
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