Mortgage News – 28th July 2024
Recent changes in the mortgage market have seen several major lenders, including HSBC, Nationwide, Barclays, TSB, Skipton Building Society, and Pepper Money, reducing their fixed rates, providing relief to new and existing customers. Rightmove reported a 7% increase in revenue for the first half of 2024, maintaining a strong market presence despite a challenging mortgage rate environment. eXp UK launched a buyer representation programme aimed at boosting agent earnings, potentially doubling their income by representing homebuyers. Additionally, April Mortgages and Skipton Building Society have introduced higher loan-to-income caps, offering more borrowing power to first-time buyers and home movers.
Mortgage Rate Changes
- HSBC cuts rates for new and existing customers
- Nationwide reduced fixed rates by up to 0.25% with a product now sub 4% at 60% loan to value. However, they increased tracker rates by up to 0.15%
- Barclays reduced their purchase and remortgage fixed rate range by up to 0.20%
- TSB reduced selected fixed rates for new and existing customers by up to 0.20%
- Skipton Building Society reduces rates across fixed and tracker deals
- Pepper Money cuts rates by up to 0.20% on their 2 and 3 year fixed rates
Rightmove Reports £12.6m Revenue Increase in Half-Year Results
Rightmove has announced a 7% revenue increase, reaching £192.1m for the first half of 2024, with an operating profit of £131.6m, up 2%. Adjusted for one-off costs, the operating profit rose to £135.2m, reflecting a 4% increase. Despite a challenging mortgage rate environment, Rightmove maintained an 80% market share, with users spending 8.3 billion minutes on the platform. RightMove Half Year Results 2024
eXp UK Launches Buyer Representation Programme to Boost Agent Earnings
eXp UK has introduced a buyer representation programme aimed at increasing member agents’ earnings, spearheaded by estate agency trainer Richard Rawlings. This programme allows agents to work on behalf of homebuyers, potentially doubling their income without additional charges. Adam Day, head of eXp UK, emphasized the programme’s potential to enhance agent earnings and improve the property market by offering dedicated buyer representation. eXp launches ‘next chapter’ buyer registration scheme
April Mortgages to lend up to six times sole and joint income
April Mortgages, a new lender offering 5-15-year fixed-rate mortgages up to 95% LTV, has increased its loan-to-income caps. Additionally, the lender will now provide loans up to six times the sole and joint income for first-time buyers, home movers, and like-for-like remortgages. Similarly, Skipton Building Society announced it will offer up to 5.5 times loan-to-income for first-time buyers.
Buyers and Sellers Question Timing Ahead of Next Week’s Interest Rate Decision
Buyers and sellers are debating whether to act before the Bank of England’s interest rate decision next week, as a potential rate cut could influence the market. A base rate cut might prompt sellers to wait for better offers, leading to higher house prices and changes in mortgage pricing. Some experts predict an immediate market surge, others advise a long-term perspective. It is important to note that rate cut may not significantly impact mortgage prices since future decreases are often anticipated by the lenders.
2 and 5 Year Swap Rates
The 2-year swap rate has decreased by 0.088% compared to last week, 0.138% since last month, and significantly by 1.127% since last year. Similarly, the 5-year swap rate has decreased by 0.082% from the previous week, by 0.050% over the past month, and dropped by 0.851% over the past year.
| Swap Rate | 25-Jul-24 | 26-Jun-24 | 26-Jul-23 |
|---|---|---|---|
| 2 Year | 4.305% | 4.470% | 5.580% |
| 5 Year | 3.842% | 3.926% | 4.783% |
Mortgage News – 22nd July 2024
Last week several major lenders, including TSB, NatWest, Halifax, Leeds Building Society, Accord Mortgages, and The Mortgage Works, have reduced mortgage rates Additionally, the Bank of England continues to grapple with maintaining its 2% inflation target, with June marking the second consecutive month at this rate despite high services inflation. Meanwhile, the UK property market remains resilient with house prices and rents continuing to rise, and King Charles has emphasized the Labour Government’s commitment to economic growth and housing reforms in his address at the opening of Parliament.
Mortgage Rate Changes
- TSB reduced rates across selected residential, buy-to-let, product transfer and additional borrowing products of up to 0.20%
- NatWest reduced rates by up to 0.23% across their purchase and remortgage range.
- Halifax reduced various products across its residential mortgage range by up to 0.22%.
- Leeds Building Society has reduced selected residential rates by up to 0.13%.
- Accord Mortgages reduced rates by up to 0.20% across its range of residential products, up to 90% loan-to-value (LTV).
- The Mortgage Works (TMW) announced rate reductions across its buy-to-let new business and switcher product range, effective from Monday 22nd July with reductions of up to 0.25%.
Criteria changes
- Gen H has expanded its mortgage criteria to allow friends to act as income boosters for loans up to 80% Loan to Value and extended immediate family to include nieces and nephews for loans up to 95% Loan to Value, enhancing affordability and aiding more aspiring homeowners.
Inflation stays at 2% in June
For the second consecutive month, UK inflation met the Bank of England’s 2% target in June.
Despite meeting the 2% target, inflation exceeded expectations, reducing the likelihood of an August rate cut from 50% to 25%. Services inflation remains high at 5.7%, fuelled by strong GDP growth. With inflation pressures expected to rise and economic indicators strong, there may be no urgency for the Bank of England to cut rates. Consumer price inflation, UK: June 2024
Bank of England misses inflation target 70% of time since 1997
Since gaining independence in 1997, the Bank of England has only maintained its 2% inflation target 30% of the time. External factors like the Global Financial Crisis have influenced these outcomes, raising questions about the rigidity of the 2% target. Some argue for a more flexible mandate considering the UK’s susceptibility to geopolitical and economic fluctuations.
UK house prices and rents continue to rise despite economic challenges
The ONS released its Private rent and house prices, UK: July 2024 report which shows UK house prices increased by 2.2% to £285,000 in the 12 months to May 2024, with similar growth seen in England, Wales, and Scotland.
Average private rents also rose by 8.6% in the 12 months to June 2024, slightly down from 8.7% the previous month. Despite economic headwinds, the property market remains resilient.
Santander clamps down on profanities in business banking
Santander announced that it will ‘now stop any payments with profanities in the reference’ for its business banking customers.
King’s Speech sets out plan to ‘Get Britain Building’
King Charles reaffirmed the Labour Government’s commitment to “Get Britain Building” in his address at the opening of Parliament, highlighting plans for economic growth, wealth creation, and high living standards. He announced the introduction of planning reforms to accelerate quality infrastructure and housing, aiming to build over 300,000 homes annually and improve tenant rights, including abolishing ‘no-fault’ evictions.
2 and 5 Year Swap Rates
The 2-year swap rate decreased by 0.088% compared to last week, by 0.138% since last month, and significantly by 1.127% since last year. Similarly, the 5-year swap rate decreased by 0.082% from the previous week, by 0.050% over the past month, and dropped by 0.851% over the past year.
| Swap Rate | 18-Jul-24 | 19-Jun-24 | 19-Jul-23 |
|---|---|---|---|
| 2 Year | 4.313% | 4.451% | 5.440% |
| 5 Year | 3.809% | 3.859% | 4.660% |
Mortgage News – 15th July 2024
Hope you had a good weekend, enjoyed the tennis. Shocked by the Trump assassination attempt and England losing the Euro Final.
In mortgage news. Last week, several major lenders, including Nationwide, Barclays, and Halifax, reduced their mortgage rates, with Virgin Money introducing retrofit boost mortgages offering up to £15,000 cashback for energy-efficient home improvements. Chancellor Rachel Reeves outlined plans to rebuild Britain by focusing on planning, affordable housing, housebuilding, and energy, while boosting investment in British businesses and launching a Growth Delivery Unit. The Bank of England’s Q2 Credit Conditions survey showed a rise in default rates on secured loans to households, while Barclays Property Insights reported stabilized rent and mortgage costs in June and rising consumer confidence despite a drop in utility spending.
Mortgage Rate Changes
- Nationwide reduce rates on their residential and buy to let ranges by up to 0.30%.
- Barclays reduced purchase and remortgage rates by up to 0.31%.
- Halifax lowered rates on their home mover and first time buyer products by up to 0.13%.
- Virgin Money reduced rates by up to 0.12% and reduced their SVR by 0.25%. They also launched retrofit boost mortgages offering up to £15,000 cashback to homeowners making energy-efficient improvements.
- Coventry cut rates for products up to 85% loan to value.
- Accord Mortgages cut rates by up to 0.25%.
- The Mortgage Works reduced rates by up to 0.25% on new limited company business.
Criteria changes
- HSBC has increased the maximum amount of borrowing available on residential purchases and remortgages and has also simplified their mortgage LTV tiers, removing the 65% LTV and 80% LTV tiers.
- Metro Bank launched its first limited company buy to let product in a bid to widen its specialist finance offering.
Chancellor, Rachel Reeves plans to rebuild Britain and make the country better off
Rachel Reeves delivered her inaugural speech as Chancellor, highlighting key manifesto pledges on planning, affordable housing, housebuilding, and energy. She also committed to boosting investment in homegrown British businesses and, on a broader economic front, announced the launch of a Growth Delivery Unit. Chancellor Rachel Reeves is taking immediate action to fix the foundations of our economy
Credit Conditions Survey – 2024 Q2
The Bank of England released its 2024 Q2 Credit Conditions survey, revealing that lenders observed an increase in the default rate on secured loans to households during Q2, with an anticipated rise in Q3. Additionally, losses given default on secured loans rose in Q2 and are expected to remain stable in Q3.
Barclays Property Insights – Rents and mortgage costs stabilize
Barclays Property Insights revealed that In June, rent and mortgage costs stabilized, showing only a 1.5% year-on-year increase, while consumer spending on utilities dropped by 15.6% due to falling energy prices. It reported that almost half of renters consider mould and damp as deal-breakers, and landlords are advised to improve property conditions to attract top-tier tenants. Despite unseasonably cold weather hampering home improvement spending, consumer confidence is rising, with Brits feeling more optimistic about their financial stability and job security. Rent and mortgage costs stabilise in June as energy bills continue to fall
2 and 5 Year Swap Rates
The 2-year swap rate decreased by 0.016% compared to last week, by 0.141% since last month, and significantly by 1.520% since last year. Similarly, the 5-year swap rate rose by 0.024% from the previous week, decreased by 0.061% over the past month, and dropped by 1.203% over the past year.
| Swap Rate | 10-Jul-24 | 11-Jun-24 | 11-Jul-23 |
|---|---|---|---|
| 2 Year | 4.401% | 4.623% | 6.038% |
| 5 Year | 3.891% | 4.090% | 5.241% |
Mortgage News – 8th July 2024
Last week we saw a range of rate reductions from high street lenders. Halifax and Nationwide reported that UK house prices remained stable with a slight monthly decrease of 0.2%, and annual growth unchanged at 1.6%. Meanwhile, mortgage approvals fell in May, student debt continues to impact younger buyers, and Labour’s recent election victory brings significant housing policy changes.
Mortgage Rate Changes
- Halifax reduce rates
- NatWest reduced rates of up to 0.23%
- HSBC reduced rates across their existing and new residential ranges
- Santander announced rate cuts, with selected residential fixed rates reducing by up to 0.16%
- Barclays reduced rates for existing customers
- Leeds Building Society reduced rates by up to 0.15% across their residential fixed rate products and up to 0.50% for limited company buy-to-let (BTL) rates by up to 0.50%
- Paragon Bank reduced its core range of buy-to-let mortgages, cutting rates by 0.15%
- The Mortgage Works reduces rates for new and existing customers (BTL)
Halifax House Price Index – UK house prices remained stable in June
Average house prices were largely flat in June, down by just -0.2% on a monthly basis, according to the Halifax HPI. The annual rate of house price growth was unchanged from the previous month, at +1.6%. House prices in June 2024 were 1.6% higher than the same month a year earlier.
Nationwide House Price Index – House price growth broadly stable in June
June’s property market slowed due to political uncertainty from the snap General Election announcement, with buyers adopting a wait-and-see approach. However, as lenders reduced rates towards the end of the month, market activity began to recover, and experts anticipate a busier second half of the year, especially if an interest rate cut occurs. While some caution remains regarding future government policies, the overall sentiment is optimistic for increased transactions and rising prices post-election. House price growth broadly stable in June
Bank of England mortgage approvals May 24
The Bank of England this morning published its May Money & Credit report, showing net mortgage approvals for house purchases fell from 60,800 in April to 60,000 in May, while approvals for remortgaging decreased slightly from 29,900 to 29,600 over the same period. Money and Credit – May 2024
Almost 1.8 million people are now in at least £50,000 of UK student debt – BBC News
With data from the BBC secured via an FOI revealing that nearly 1.8 million people are now in at least £50,000 of UK student debt. Student debt is impacting younger buyers’ mortgage affordability. Almost 1.8m people owe £50,000 or more in student debt
General Election 24
Labour won a landslide victory in the UK general election, with Keir Starmer becoming the new Prime Minister after securing more than 412 seats, while the Conservatives experienced their worst result ever, with only 121 seats. High-profile Conservatives, including Liz Truss and Jacob Rees-Mogg, were defeated, and Reform UK leader Nigel Farage was elected as an MP for the first time. Labour’s housing policy includes abolishing Section 21 evictions, investing £6.6 billion in energy efficiency, and building 1.5 million new homes, with a focus on affordable housing and tenant protection.
2 and 5 Year Swap Rates
The 2-year swap rate decreased by 0.016% compared to last week, by 0.141% since last month, and significantly by 1.520% since last year. Similarly, the 5-year swap rate rose by 0.024% from the previous week, decreased by 0.061% over the past month, and dropped by 1.203% over the past year.
| Swap Rate | 04-Jul-24 | 05-Jun-24 | 05-Jul-23 |
|---|---|---|---|
| 2 Year | 4.453% | 4.594% | 5.973% |
| 5 Year | 3.952% | 4.013% | 5.155% |
Mortgage News – 1st July 2024
This week changes in mortgage rates and criteria include reductions by Barclays, HSBC, and Coventry BS across various product ranges, while NatWest increased its maximum loan-to-value for new builds. The Bank of England’s latest Financial Stability Report warns of rising mortgage payments for over 3 million households in the next two years. The UK construction sector is struggling despite GDP growth, and Lloyds Bank predicts that ultra-low interest rates are unlikely to return, and lastly SWAP rates saw a slight rise since last week.
Mortgage Rate Changes
- Barclays announced reductions up to 0.28% on a selection of products across its residential purchase range.
- HSBC reduced a wide range of rates across their residential and BTL range.
- Coventry reduced their residential and BTL fixed rates.
Criteria Changes
- NatWest announced an increase in their maximum loan to value (LTV) for new build properties. (Houses up to 90% from 85% and Flats up to 85% from 75%).
Financial Stability Report – June 2024
The Bank of England’s Financial Stability Report (Financial Stability Report – June 2024) warns that over 3 million households will see their mortgage payments rise in the next two years. Many homeowners coming off fixed-rate deals will face higher borrowing costs, with around 35% of mortgage accounts still paying rates below 3%. Typical owner-occupiers whose fixed rates expire between June 2024 and end-2026 are expected to see their monthly payments increase by about £180, with about 400,000 households experiencing hikes of 50% or more.
UK Construction Sector Decline Amid Stagnant Economy
Official ONS data revealed that the UK GDP grew by 0.7% in Q1 2024, but the economy showed no growth in April 2024. The construction sector contracted by 0.6%, prompting experts to suggest that a general election might help revitalize this struggling sector. Despite the overall GDP increase, the construction industry’s performance remains a significant concern. GDP quarterly national accounts, UK: January to March 2024
Lloyds Bank – Ultra-low interest rates are unlikely to return
In a Sky News interview, Lloyds Banking Group CEO Charlie Nunn warned that ultra-low interest rates are unlikely to return, predicting mortgage rates to remain between 3.5% and 4.5%. Stating such clarity is essential as some borrowers still hope for lower rates that may never come. Post-Global Financial Crisis rates were abnormal, and the current rates reflect a return to reality.
Rightmove reveals 61% rise in first-time buyer mortgage payments
A Rightmove study reveals that since 2019, average mortgage payments for first-time buyers have increased by 61% to £1,075 per month, significantly outpacing a 27% rise in wages. The average rate for a five-year fixed, 80% LTV mortgage has more than doubled from 2.24% to 5.09%, and average first-time home prices have risen by 19%.
2 and 5 Year Swap Rates
The 2-year swap rate increased by 0.070% compared to last week, by 0.210% since last month, and decreased significantly by 1.231% since last year. Similarly, the 5-year swap rate rose by 0.105% from the previous week, by 0.163% over the past month, and decreased by 0.957% over the past year.
| Swap Rate | 27-Jun-24 | 28-May-24 | 28-Jun-23 |
|---|---|---|---|
| 2 Year | 4.469% | 4.676% | 5.700% |
| 5 Year | 3.928% | 4.102% | 4.885% |
