Docklands News

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)  

City A.M. interviews Uma Rajah, the CEO and co-founder of CapitalRise, about how the prime central London market remains strong despite Brexit, Covid and market mayhem. Rajah said the firm is seeing “high demand” right now, having processed £46m in loans two weeks ago, and said its resurgence can be seen with a 71% growth in prime central properties since the pandemic. Uma said the market is not immune to the financial turbulence, adding that: “rising interest rates makes borrowing more expensive” and “that has a massive impact on all areas of the property market.” However, she said in the prime property market “people tend to borrow less because of the level of affluence.” She also warns that energy crisis may however have a secondary impact on the industry, with “general cost inflation” being a major factor in redevelopment and regeneration of undeveloped high-end assets. 

City A.M.