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According to Halifax, the average London first-time buyer spends £489,098 - compared to just over £200,000 nationally. That means the average first-time buyer would need to save around £25,000 to be able to afford Chancellor Rishi Sunak newly announced 95% mortgage guarantee scheme.
Evening Standard (12/03/2021
Despite most other sectors suffering in 2020, house prices bucked the trend by increasing while the economy shrank, according to a new Office for National Statistics report assessing the damage done by Covid-19. The average UK house price reached a record high of £252,000 in December 2020 — an increase of 8.5% over the year, the ONS said. The surge in house buying at the end of 2020 may reflect the pent-up demand from people who had been unable to buy during the lockdown — and changes to the types of property people wanted such as houses with gardens, the agency added. The ONS said the difference between 2008 and 2020 could be because the former crisis was largely related to “structural issues with financing mortgages… Whereas the fall in GDP in 2020 was possibly driven more by reduced opportunities to spend, caused by lockdown restrictions, rather than primarily a lack of funds.”
The Daily Telegraph (15/03/2021) Daily Star(15/03/2021) City AM (15/03/2021) Daily Mail(15/03/2021)
Homeowners used their savings to reduce mortgages at a record rate in the final quarter of last year. Nearly £18bn of mortgage debt was repaid in the last three months of 2020, according to analysis of official data by the Equity Release Council. Homeowners made £5.1bn in lump sum payments, the highest figure since 2007. The payments were fuelled by the record level of savings that people have built up during the pandemic, as opportunities to spend dwindled in lockdown. Although overpayments soared, regular loan repayments remained below pre-pandemic levels as some mortgage-holders continued to defer in the face of financial pressures. “Mortgage holders across the nation have been polarised by the experience of the pandemic,” says Jim Boyd, chief executive of the Equity Release Council.
The Times (12/03/2021) Daily Mail (12/03/2021)
House prices dropped slightly for the second consecutive month in February, according to Halifax. The lender’s latest housing index shows that property values fell by 0.1% month-on-month in February, following a 0.4% decrease in January. However, across the UK, property values were still 5.2% higher in February than the same month last year, Halifax said. However, the bank cautioned that it would not expect the level of growth seen in house prices across 2020 to be sustained throughout this year. The average UK house price in February was £251,697. Russell Galley, Managing Director, Halifax, said the housing market has continued its “softer start to 2021” with average prices dropping off slightly compared to the previous month. He continued: "However, with annual house price inflation currently at +5.2%, property values remain comfortably higher than 12 months ago, when February was the last full month before lockdown.”
Evening Standard (05/08/2021) Daily Express (05/08/2021) Daily Mail (05/08/2021) BBC News (05/08/2021) The Daily Telegraph (05/08/2021)
Homebuyers taking advantage of the Government's new 95% mortgage scheme could end up paying premium rates, experts have warned. The plans will allow buyers to secure properties worth up to £600,000 with just a 5% deposit. It was hoped that the Government's guarantee behind the loans would help to lower rates from what is currently being offered by risk-averse banks. But brokers have warned that lenders could continue to charge higher rates, leading to pricey monthly instalments. Mark Harris of SPF Private Clients, a mortgage broker, estimated that rates for a five-year fixed deal could be between 3.5% and 4%, while Martin Stewart of advice firm London Money said they could be even higher. The average quoted mortgage rate for a 95% mortgage was 4.07% in January 2021, according to the Bank of England.
The Daily Telegraph (08/03/2021)
The total value of new mortgages set to be handed out in the coming months reached its highest level since 2007 towards the end of last year, Bank of England figures show. New mortgage commitments in the fourth quarter of 2020 totalled £87.7bn – however, the share of mortgages advanced to borrowers with deposits of less than 10% was 1.2%, marking “the lowest level since these statistics began in 2007”. Gross lending totalled £249bn in 2020, showing a 9.8% fall compared with 2019 (£276bn).
Evening Telegraph (10/03/2021) Daily Express (10/03/2021)