Docklands News

Figures from Nationwide show that house price growth has slowed for the first time since July 2021. Prices rose by 9.5% in September, marking a slowdown on the 10% increase seen in August. House prices averaged £272,259 in September, which, after taking into account seasonal effects, was virtually unchanged from August. Ten of the UK's 13 regions recorded slower annual price growth in the third quarter. The only regions to show an increase in annual house prices in September were the East Midlands, West Midlands and London. South-west England was the best performer, with the average house price up 12.5%. However, the rate of growth had slowed from 14.5% in the second quarter. London remained the weakest region with growth of 6.7% in the third quarter, up from 6% growth the previous quarter. Robert Gardner, Nationwide's chief economist, called the slowdown "modest", with a house shortage still meaning "firm" growth.  

Daily Express (30/09/2022)   Evening Standard (30/09/2022)   The Guardian (30/09/2022)   The Times (30/09/2022)  

Average house prices across the UK could increase by a further £34,000 over the next 12 months, according to market analysis by specialist property lending experts Octane Capital. The experts believe the price hike will be spurred by cuts to stamp duty announced by Chancellor Kwasi Kwarteng. The research looked at the average monthly rate of house price growth following the initial stamp duty holiday in 2020/2021 and what a similar rate of growth could mean for the market over the next 12 months. The figures revealed that during the stamp duty holiday, the average house price across England climbed at a rate of 0.9% each month. House prices increased from £253,226 when the holiday began, to £287,370 when the holiday came to an end in September 2021.

Daily Express (03/10/2022)  

Kwasi Kwarteng is understood to be considering an extension to the Government’s mortgage guarantee scheme following a meeting with bank bosses on Thursday. Chief executives from NatWest, Lloyds Banking Group, HSBC, Santander and TSB along with executives from Barclays, Nationwide, Virgin Money and Starling Bank were asked to comment on a number of options to support consumers struggling to secure mortgages. The Chancellor is now mulling an extension to the mortgage guarantee scheme beyond its December deadline. The guarantee compensates a lender for losses suffered in the event of the property having to be repossessed and it is hoped that by extending it lenders will feel more confident offering reasonably priced low-deposit mortgages. Ray Boulger, broker at John Charcol, said an extension of the mortgage guarantee scheme would be “good news for anyone in need of a mortgage with only a 5% deposit.” 

Financial Times (06/10/2022)   The Guardian (06/10/2022)  

Mortgage approvals increased by 16% in August, with Bank of England figures showing that lenders approved 74,300 homebuyer loans. This compares to 63,700 in July and represents the highest number since the start of the year. It also reverses a series of declines recorded in the past few months. Approvals for re-mortgaging also increased to 49,400 in August, up from 48,400 in July. Net mortgage borrowing rose by £1bn to £6.1bn, compared with a pre-pandemic average of £4.3bn. Samuel Tombs, chief UK economist at Pantheon Macroeconomics said the “sudden leap” in house purchase mortgage approvals in August “likely reflects people attempting to secure loans ahead of expected increases in mortgage rates, rather than a fundamental strengthening of demand.” 

Daily Mail (30/09/2022)   Evening Standard (30/09/2022)   The I (30/09/2022)   The Times (30/09/2022)  

City economists have warned that house prices could fall by more than 20% if the Bank of England is forced to hike interest rates steeply. Mortgage affordability – the ratio of a home purchase loan to the size of the borrower’s income – may have to drop from 3.5 to 2.5 if lenders start charging 6% on mortgages. Andrew Wishart, senior property economist at consultancy Capital Economics, said: “If that happened overnight, it would imply a 21% fall in house prices.” Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said that if the Bank did hike rates to the market’s expectations of 6%, it “would lead to a sharp rise in mortgage defaults,” adding that a sudden wave of borrowers being unable to service their mortgage debts could “set in motion a banking crisis.” 

City AM (27/09/2022)  

Mortgage repayments could surge by as much as £800 per month for the typical homeowner as financial markets bet on 6% interest rates next year. Markets expect a series of sharp increases to take the headline rate to 6% or above next year, the highest rate since 2000, in the wake of market chaos following the mini-Budget. Someone who bought in the first half of 2021 - and so whose two-year fix expires next year, when the base rate could be 6% - will see their monthly repayments jump from below £900 to £1,696, or £800. This amounts to £9,600 a year more. If the base rate increases from 2.25% to 3% before November, that would take the average rate on a two-year fix for someone with a 25% deposit from 4.14% to 4.89%. 

The Daily Telegraph (26/09/2022)   The Independent (26/09/2022)   The Times (26/09/2022)