Docklands News

Monthly mortgage repayments in the UK have increased by almost £200 since the Bank of England raised interest rates two years ago, according to official figures. On average, indebted households are now paying an extra £2,220 per year, resulting in a total of £20bn more being spent on housing costs. The average mortgage payment reached £903 in December, rising by £100 from the previous year. Martin Beck, chief economic adviser to the EY Item Club, said mortgage payments have risen more rapidly than earnings since the pandemic struck, hitting families' spending power. He said: "Even strong wage growth has not been sufficient to compensate for higher mortgages. Things are probably going to get worse as wage growth slows at the same time as mortgage payments continue to climb, reflecting the fact that 1.5m households are going to refinance this year at higher rates".

The Daily Telegraph (13/01/2024)  

According to a new survey from Nationwide, 84% of people expect this January to be the toughest yet financially due to Christmas spending added to debt from the cost of living crisis. More than half (52%) believe January is the time of year that causes the most financial stress. While 51% blamed Christmas spending for January being a tough month, 43% highlighted energy costs as a factor. Added debt due to the increased cost of living was a significant issue for 37%. 

The Independent (15/01/2024)  

Halifax's House Price Index reveals that UK property values increased by 1.7% in 2023, beating expectations. While some regions experienced significant drops, others saw an increase, providing positive news for homeowners. Overall, average house prices rose by 1.1% month-on-month in December - the third consecutive monthly rise. The average house price in December 2023 was £287,105, up from £282,305 the previous year. Kim Kinnaird, director of Halifax Mortgages, attributes the growth to a shortage of properties on the market rather than buyer demand. Northern Ireland saw the biggest yearly increase in house prices by far. The average price of a home there in December 2023 was £192,153 - up 4.1%. Scotland was in second place, with the average price of a house there at £205,170 - up 2.6%. South East England recorded the biggest fall in prices. The average price of a home in the region in December was £376,804 - down 4.5%. 

Financial Times (06/01/2024)   The Daily Telegraph (06/01/2024)   The Guardian (06/01/2024)   The Independent (06/01/2024)   The Times (06/01/2024)  

More than one in 10 borrowers in Britain, around 1.6m, are locked into five-year fixed mortgages taken out during the pandemic property boom, meaning they could escape the mortgage crisis unscathed. They are not due to refinance until 2025 or after, when analysts now expect interest rates will have reverted to far more manageable levels. Analysis shows that more than 75,000 borrowers are also signed up to fixed interest periods of more than five years. In addition, more than half of homeowners in Britain do not have a mortgage, which provides another layer of protection for the housing market from distressed sales caused by high borrowing costs. David Hollingworth, associate director at L&C Mortgages, said: “The rates have shot up because there is something of a lag period. The big benefit of that is as rates have risen rapidly many [borrowers] have been protected from those increases. There's a lot who will be coming towards the end of their fixed rate. The most unfortunate ones would have already come to that point and had to refinance".

The Daily Telegraph (10/01/2024)  

Banks are set to cut mortgage rates to their lowest levels since 2022, as strong competition between lenders drives down the cost of home loans. The Co-op Bank will release a two-year fixed-rate deal at 3.85%, the first below 4% in 15 months. Other big lenders, including Barclays and Nationwide Building Society, are expected to follow suit. The financial data analyst Moneyfacts said the average rate on a two-year fix had fallen from 6.04% at the start of last month to 5.83% on Friday, and the average five-year fix from 5.65% to 5.46%. David Hollingworth, from the broker L&C Mortgages, said the lower rates "should help lift some of the new year blues for borrowers coming off their existing deals". About 1.6m homeowners are due to come off their existing fixed deals this year, according to the trade association UK Finance. 

The Times (08/01/2024)  

Jeremy Hunt has admitted that buying a first home in Britain today is a "real struggle" after Sir Howard Davies claimed it was "not that difficult". The boss of NatWest said that people would "have to save more" but suggested the system had simply reverted to how it "used" to be. Housing campaigners criticised his claim while shadow chancellor Rachel Reeves branded Sir Howard "out of touch". When asked about the comment, the Chancellor referenced the much higher mortgage rates compared to 18 months ago. He said: "We know that makes it a real struggle for people trying to buy their first home." He insisted the way to deal with the problem was to continue to focus on cutting inflation.

The Independent (06/01/2024)