Docklands News

Mayor of London Sadiq Khan has urged ministers to reinstate mortgage payment holidays to ease the financial burden on homeowners amid soaring inflation rates. Mr Khan also called for the reintroduction of the Mortgage Rescue Scheme which, prior to 2014, allowed households struggling with mortgage repayments to stay in their homes by selling them to social landlords and continuing to live there as tenants. He said this would be the “right and proportionate approach” to tackling the ongoing crisis which “is only going to become more significant and dangerous”, adding: “Many London homeowners already face sizable monthly mortgage payments, alongside rising costs and stagnant wages. With re-mortgaging rates now hitting levels not seen in more than a decade due to the economic chaos created by this government, it is essential that ministers act to ensure Londoners do not pay the price by losing their homes". 

Evening Standard (07/11/2022)  

Brokers report that borrowers are moving to tracker mortgages at the highest rate in more than a decade. Borrowers are betting recent interest rate rises will reverse next year and they will be able to lock in a fixed rate lower than today’s prices. The average two-year tracker rate is 4.10%, compared with a typical two-year fixed rate of 6.42% – equal to a £273 monthly saving on a £200,000 mortgage. Nathan Reilly, of Twenty7tec, said: “It seems [borrowers] are keen to see how the market settles and are therefore attracted by the additional flexibility a tracker could offer".

The Daily Telegraph (08/11/2022)  

Ingenious Real Estate has completed a £26m loan financing deal to support the development of a mixed-use scheme in East Ham. The development, at the former Boleyn Cinema site next to Upton Park, will see the construction of a five-to-eight storey building comprising four blocks around a communal courtyard and additional roof gardens. It will include 88 one-, two-, and three-bed residential units, alongside commercial space and a gym. 

Development Finance Today (31/10/2022)  

London has retained its title as the best European city for property investment for a second year in a row, but the underlying picture is bleaker, according to an annual survey of about 900 of the world's biggest property investors, lenders, developers and advisers conducted by the Urban Land Institute and PwC. More than 70% of those surveyed believed Europe would move into a recession this year, affecting development activity, investment volumes and property values. In Britain, commercial property values started to weaken this year as investors became more cautious. The survey showed that a further decline was "inevitable," with the pricing between prime and secondary real estate expected to widen. The majority of respondents were concerned about construction costs and the availability of resources in 2023. 

The Times (01/11/2022)  

House prices fell for the first time in more than a year in October, according to figures from the Nationwide Building Society. The average price dropped 0.9% to £268,282 last month, while year-on-year growth slowed from 9.5% to 7.2%. Robert Gardner, Nationwide’s chief economist, said a “sharp rise” in mortgage rates has had an impact, commenting: “Higher borrowing costs have added to stretched housing affordability at a time when household finances are already under pressure from high inflation.” Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the fall in prices “provides the strongest signal yet that house prices will buckle in the face of the surge in mortgage rates and the squeeze on real disposable incomes.” 

BBC News (01/11/2022)   Daily Mail (01/11/2022)   Financial Times (01/11/2022)   The Daily Telegraph (01/11/2022)  

Almost two in five new mortgages are being taken out for 30 years or more as homeowners turn to ultra-long deals to keep down monthly repayments. Traditionally borrowers have signed up for 25-year loans, but the number of households seeking out longer terms has more than doubled since 2007. More than 22,000 home loans agreed in July – 39% of the total – were for 30 years or more, according to trade body UK Finance. Some of these were for 35 and even 40 years. In July 2007 the total was 10,000. Brokers say more homeowners are extending the length of their deals when remortgaging to ease the pain of soaring rates, but warn that they will pay much more interest in the long term. 

Daily Mail (29/10/2022)