Anthony Emmerson

Most people who have that cash available try and pay off the mortgage with it.

I definitely wouldn't advocate that at all.

The setup fee

It basically comes down to mathematics, John.

If the differentiation between a product with a fee and one without a fee multiplied by your loan balance over a two, three, or five-year period that you take the mortgage for, generally, we'd advocate the product with the fee if the savings are more than the cost of the fee.

As far as the fee is concerned, obviously, we were talking earlier about the financial impact of applying for a mortgage.

We never really advocate that a client pays for an arrangement fee upfront, mainly because of the fact that if we change lender, you then have to go back to them and ask for a refund.

It's a little bit like dealing with HMRC, quick to take your money, but really slow to give it back.

So I would say to you that, you know, you add it to your mortgage, but each one of the lenders generally has an overpayment facility allowed, which is 10% of the outstanding mortgage balance.

So if you add the fee, best practice would be your first payment goes out, you ring the lender up, you make that thousand pound cash payment, and effectively you won't be incurring any interest on that money, but you'll still be benefiting from the cheaper rate that that product gives you.

We generally find the magic number seems to be around about 170 odd thousand pounds because at that sort of level of loan size, the multiple between the rate difference means that paying the fee at a thousand pounds is either worth it or not.

Once you go to 200, 300, 400,000 pounds worth of lending, then generally speaking, the fee product is always worth taking.

I think the market is split, in my opinion, into three.

You've got your super prime London properties, which very, very high values, lots of foreign buyers coming in and buying those properties or not, as it might be.

They've seen a bit of a knock in confidence in pricing because of the fact that the government, the taxation structures, all the other bits and pieces work against them.

Then you've got your stock standard UK house for a family unit.

That seems to be quite strong and still achieving, in most cases, it's asking price if not over.

Then you've got your third, which is your flats.

Now, all those things that you mentioned earlier, the leasehold, the fact that your service charges are quite high on a lot of these new-build properties and the like, and the uncertainty as to what's going to happen with the lease is leading to those properties being a little bit more uncertain and a little bit

lower in price than we would have seen a couple of years ago.