Docklands News

The average interest rate on a two-year fixed mortgage has crept above 4% for the first time in almost ten years, following the Bank of England's latest base rate increase. An average two-year fixed rate mortgage is now at 4.09%, according to Moneyfacts: 62.3% more expensive than the same time last year when it was at 2.52%. It marks the first time the rate has breached 4% since February 2013 when it hit 4.09%. A typical fixed five-year mortgage - now a more popular option as buyers seek to shield themselves from further rate rises - has risen from 2.75% last August to 4.24% today. 

Daily Mail (22/08/2022)  

Britain’s biggest lenders are changing mortgage rules to target wealthier borrowers amid an affordability squeeze brought on by surging inflation. Halifax has upped its minimum loan size from £25,000 to £100,000 on some of its two and five-year remortgage deals. Experts said many lenders were competing to attract wealthier homeowners as the cost of living crisis leaves less affluent households struggling to pay their bills. It comes as NatWest relaxed its lending limits for wealthier borrowers. It will now offer those who earn more than £75,000 per year a mortgage of up to five-and-a-half times their annual income. The new rules apply to mortgages sold using a broker and joint applicants must have a combined income of at least £100,000 a year. Earlier this month Nationwide building society increased its maximum loan size from £2m to £5m. Experts said this was also to target weather borrowers. 

The Daily Telegraph (20/08/2022)  

House price growth slowed from 12.8% to 7.8% between May and June, a decline that marks one of the steepest monthly drops in annual growth ever recorded by the Office for National Statistics (ONS). The slowdown was so large partly because the annual growth rate was based on huge house price rises recorded in June 2021, the final month in which buyers could benefit from the full stamp duty holiday. The ONS figures show that the average property value climbed to £286,000 in June, an increase of £20,000 on a year earlier. While annual house price growth cooled from 13% to 7.3% in England and from 14.1% to 8.6% in Wales, it remained steady at 11.6% in Scotland. London remained the most expensive of any region in the UK, sitting at a record level of £538,000 in June 2022.

Daily Mail (17/08/2022)   Financial Times (17/08/2022)   Sky News (17/08/2022)   The Daily Telegraph (17/08/2022)  

House price falls are imminent amid soaring mortgage rates and increased pressure on household budgets, according to the Centre for Economics and Business Research (CEBR). The analysis suggests there will be a downturn in 2023, with prices set to fall by 4% next year. Meanwhile, Capital Economics has forecast a two-year property market downturn, with price falls of between 5% and 10% by the end of 2024. Andrew Wishart of Capital Economics comments: “The historical record shows that increases in interest rates of the scale that we are seeing now are always a precursor of house price falls". Martin Beck, of the EY Item Club, notes that more expensive properties, whose buyers are less dependent on the mortgage market and who have more savings, are more likely to hold their value but “properties for first-time buyers might see outright falls".

The Daily Telegraph (13/08/2022)  

The number of available buy-to-let deals has plunged by a third since June as lenders withdrew 1,100 deals in two months, according to data from Moneyfacts. In July alone, the number of available mortgages fell by 14%. Experts warned that banks are ditching their best buy-to-let deals as rising interest rates squeeze their margins. Rates on buy-to-let deals have also rocketed. On August 1st, the average rate on a five-year fixed-rate buy-to-let mortgage was 4.49%, a jump of 1.33 percentage points from the start of February. Rates on two-year fixes jumped from 2.9% to 4.04%. As of August 1st, there were 2,375 buy-to-let mortgage deals available, compared to 3,484 at the start of February.

The Daily Telegraph (15/08/2022)  

Financial regulators have granted specialist lender Perenna a licence to offer mortgages with fixed rates of up to 50 years. Perenna could give buyers rates of 4 to 4.5%. It will initially provide loans locking in rates for 30 years. 

Financial Times (15/08/2022)   The Sun (15/08/2022)