Docklands News

Homebuyers could see their borrowing power drop by £77,000 if the bank rate reaches 6% by the end of the year, according to calculations commissioned by the Sunday Telegraph. Mortgage brokers have reported "disastrous" drops in the size of loans being offered, as rising rates mean borrowers are less able to pass lenders' "affordability". Chris Sykes, of London brokerage Private Finance, said that several of his clients had seen the maximum loan they could borrow falling by hundreds of thousands of pounds compared with 18 months ago. He said: "I've had to take a lot less for granted when it comes to affordability. Cases where you'd expect affordability to pass with flying colours now actually need some in-depth analysis to achieve what the borrowers would like." 

The Sunday Telegraph (18/06/2023)  

Chancellor Jeremy Hunt has ruled out introducing major financial support for mortgage holders, stating that offering mortgage relief schemes would "make inflation worse, not better." Mr Hunt said: "Much as we sympathise with the difficulties and will do everything we can to help people seeing their mortgage costs go up, we won't do anything that would mean we prolong inflation." Instead, the Chancellor will meet with mortgage lenders on Friday to discuss what help they plan to give to those unable to keep up with higher mortgage payments, as well as what "flexibilities" they will offer to families in arrears. 

BBC News (20/06/2023)  

The amount of money lent in new mortgages has dropped by 26.3% year-on-year, according to Bank of England figures. Some £58.8bn was borrowed in new mortgages in the first three months of 2023, the lowest level since the period between April and June 2020 when the pandemic lockdown led to a temporary housing market shutdown. New mortgage applications approved for the coming months totalled £48.9bn, down 40.7% from £82.5bn a year ago and again the lowest since April-June 2020. The share of people borrowing to remortgage increased to 34.8%, up 5.8 percentage points since the same time the previous year. Meanwhile, the number of borrowing to buy a new home was 50.1%, down 0.6 percentage points in a year and again the lowest since the start of the pandemic. Borrowing by buy-to-let landlords accounted for 9.8% of the total, the lowest seen since 2011. 

Daily Mail (17/06/2023)  

Developer London Square has withdrawn plans to build more than 1,200 homes around the Ikea store in Greenwich due to "spiralling costs" of construction and building materials. The scheme, called Peninsula Gardens, would have added 1,290 new homes to the east Greenwich area. The site's B&Q store would have been demolished and the Ikea car park reduced by more than 200 spaces. London Square said it was reviewing the viability of the development and may submit a revised application in the future. Nearly a quarter of the homes would have been for London Affordable Rent. 

Evening Standard (09/06/2023)  

Banks have been instructed by the Prime Minister to protect struggling homeowners from soaring mortgage costs as traders price in further interest rate hikes following the release of strong wage growth data. Markets are forecasting that rates could rise as high as 6%, sending Government borrowing costs to their highest since 2008. The yield on two-year gilts rose to as high as 4.9%, surpassing the peak of 4.65% reached in the autumn. Mortgage rates have been climbing sharply in recent weeks, cutting further into household disposable income and diminishing profits for landlords. Rishi Sunak’s spokesman said: “The Chancellor has made clear his expectation that lenders should live up to their responsibilities and support any mortgage borrowers who are finding it tough right now.” Banks are expected to offer support to vulnerable borrowers, including mortgage holidays and deals to restructure their payments. 

Daily Mail (13/06/2023)   The Daily Telegraph (13/06/2023)   The Guardian (13/06/2023)   The Times (13/06/2023)  

Millions of Britons are living in areas where they are either unable to afford a mid-priced property, face a disproportionately high rent, or both, a Guardian analysis reveals. It shows that close to half of the postcode districts (48%) included in the research are "rental traps" - areas in which a family cannot afford to buy a mid-price property. In a further 11% of the areas it is not only unaffordable to buy but also to rent because the cost eats into a disproportionate amount of the household's income. Figures from the Office of National Statistics show that, while earnings in England and Wales have doubled since 1997, house prices have increased at a much faster pace, multiplying by 4.5 times over the same period. In the year to September 1997 a mid-range house in England cost 3.5 times the median full-time salary, by 2022 that ratio had grown to 8.3 times a person's median earnings. 

The Guardian (10/06/2023)