Docklands News

Mortgage availability has hit a six-month high, with data from Moneyfacts showing that the number of residential mortgages on the market surged to 4,341 at the start of February. Data shows that the total has since climbed by a further 150 to hit 4,491. This marks a high not seen since August, with September’s controversial mini-Budget having unsettled markets and seen the withdrawal of many deals. While the average rate for a two-year fixed-rate mortgage surged from 4.7% to a peak of 6.65% in October, some lenders are now offering fixed-rate mortgages at rates lower than the 4% Bank Rate. On February 10, the average two-year fixed rate dropped to 5.36%. The average five-year fix has fallen from 6.51% in October to 5.08%. But many first-time buyers will not benefit from the price war. Falling prices mean lenders are holding back from re-entering the market for those with small deposits, who are most at risk of getting into negative equity. 

The Sunday Telegraph (12/02/2023)  

Credit rating agency Moody’s has warned that mortgage lenders risk reputational damage if they fail to help customers struggling with rising borrowing costs. It said banks and building societies faced “social risks” from interest rates that are climbing as the Bank of England looks to contain inflation. Moody’s said: “We expect banks to work proactively with their customers to refinance maturing loans or, for those with constrained cash flows, to avoid default,” adding: “Failure to do so would entail reputational risk". This comes just a few months after Financial Conduct Authority chief executive Nikhil Rathi warned financial services firms that how they navigate this period of economic turmoil “will determine the industry’s reputation for decades ahead". 

The Times (13/02/2023)  

Transport for London have joined forces with Network Rail with the aim of using their huge land banks to build thousands of homes in and around London. The duo are among the biggest  landowners in the southeast and between them own nearly 14,000 acres of land across London and the home counties. Although the majority of that land is operational, on any that is not being used and can be repurposed, the pair’s plan is to build 20,000 homes or more over the next decade. 

The Times (07/02/2023)  

The latest figures from Halifax show house price growth in January was unchanged month-on-month, following monthly decreases of 1.3% in December and 2.4% in November. The annual rate of house price growth slowed to 1.9% last month, the weakest increase in three years. The average UK house price is now more than £12,000 below a peak in August, though it still remains some £5,000 higher than in January 2022. Kim Kinnaird, at Halifax Mortgages, said the trend of higher borrowing costs hitting demand was likely to continue in 2023. 

Estate Agent Today (07/02/2023)   The I (07/02/2023)  

The Bank of England’s suggestion that inflation may come under control sooner than expected should send interest rates on five-year fixed mortgages to below 4% in the near future, experts say. The average rate on two and five-year fixes fell from 6.47% and 6.32% at the start of November to 5.44% and 5.2% at the start of this month, according to the data firm Moneyfacts. The Bank rate is now at a 14-year high of 4% after the tenth successive increase on Thursday. The cheapest mortgage now starts with a 3 for the first time since September, with Lloyds and Virgin Money both offering ten-year fixes at 3.99%. Even tracker loans, which are linked to the base rate and will increase in line with it, have fallen from an average of 4.48% at the start of January to 4.39% this month for a two-year fix.

Financial Times (03/02/2023)   The Times (03/02/2023)  

Research by the EY Item Club suggests growth in mortgage lending is set to fall to 0.4% this year, its lowest level in more than a decade. Higher interest rates, a weak economic outlook and falling house prices will dampen demand along with a tightening of banks’ lending criteria. Anna Anthony, UK financial services managing partner at EY, warned: "Stretched affordability will affect loan demand across all fronts and banks should be preparing for low and, in some cases, negative lending growth rates." Lending to businesses grew by 3.7% in 2022, but is expected to fall by 3.8% this year, before returning to growth of 0.9% next year. Dan Cooper, UK head of banking at EY, said UK businesses faced rises in interest rates but much of the borrowing over the course of the pandemic was in the form of government-guaranteed loans with low interest rates. Meanwhile, corporate balance sheets had strengthened as stresses associated with the pandemic eased. 

The Daily Telegraph (06/02/2023)   The Times (06/02/2023)