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Buy-to-Let Watch: Grab 2024 with both hands

Last year’s mortgage market volatility was unprecedented, to say the least.

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We saw ongoing interest-rate rises, consecutive base-rate increases, and a huge (and often contentious) public discussion about what could be the most extensive legislation changes the sector had ever seen, by way of the Renters (Reform) Bill.

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Speaking with industry peers and my landlord clients, it’s fair to say we’re all happy to put 2023 behind us. And, what’s more, this upcoming year shows a much brighter outlook for the property market.

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Mortgage Strategy

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Rental Market Crisis As Demand Continues To Outweigh Supply

Letting agents have highlighted a persistent high demand for rental properties, coupled with a significant decline in available supply. This imbalance is primarily attributed to the dwindling number of new landlords entering the market, exacerbated by existing tenants choosing to stay put to circumvent the hike in rental prices.

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A recent survey conducted by the Royal Institution of Chartered Surveyors (RICS) among its members has unveiled a noticeable uptick in tenant demand throughout the three months leading to January. Despite this, there’s a sense of the market cooling off, possibly mitigating the ongoing reduction in new landlord listings.

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Source: Landlord Knowledge

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A third of UK buy-to-let landlords plan to expand portfolios in 2024

Investors are spotting opportunities in the current market as more buy-to-let landlords make plans to snap up further properties in the year ahead.

Market sentiment in the buy-to-let sector has been impacted by a number of factors in recent years, from tax changes to the more recent issue of rising mortgage rates. House prices across much of the country have also slowed their pace of growth – which comes as no surprise after the rapid acceleration of 2020-2022.

However, as is often the case in the UK property market, investors continue to find the most promising assets, in terms of both location and property type, to keep activity strong in the sector. While 2023 was a year of uncertainty, investors are finding more to be positive about for 2024.

Inflation has fallen rapidly from its high point last year, despite the most recent announcement that revealed an small, unexpected rise. Interest rates have also been frozen for some time now, yet lenders have been reducing their rates and unveiling a wider array of products and incentives, including for buy-to-let landlords.

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Along with more positive house price news over the past couple of months, these factors have all combined to influence plans for landlords in the coming 12 months, and the latest research from Together Money has found that more than a third – 34% – of buy-to-let landlords will expand their portfolios this year.

More optimism for landlords

The survey by Together also found that 68% of landlords currently feel optimistic about their business outlook for 2024, despite 10% of respondents saying they they have “reservations”. A quarter of those surveyed also said they were planning to refinance their properties to “support business objectives” this year.

Since the start of 2024, some of the UK’s major banks and building societies have brought fresh, cheaper deals to the table since the start of 2024, including Co-operative Bank, First Direct, HSBC, NatWest, Halifax, Clydesdale Bank and Leeds Building Society, with a number of these lenders also offering buy-to-let mortgage deals.

There is now a growing number of sub-4% mortgage products available for landlords, which is a vast improvement on the peaks of almost 7% last summer. Borrowers are still urged to thoroughly check the details of each product though, as deals with the lowest rate aren’t always the best value for money for every customer.

Of course, some landlords with less borrowing power or those who are simply ready to cash in on their property assets are leaving the market at the moment, but this is also presenting opportunities for portfolio landlords to take on existing buy-to-let properties.

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Should you use a specialist lender?

The research from Together found that 42% of its landlord respondents said they would prioritise using a specialist lender rather than a mainstream one over the next 12 months (although this was specifically related to taking out additional financing for commercial property).

The reasons given were that specialist lenders are often prepared to take on greater risk and offer larger loans, while supporting entrepreneurial plans; an answer which was selected by 39% of respondents. 29% said they’d opt for a specialist lender because they are quicker, while 29% also said they provide the best service.

Where the purchase isn’t straightforward, such as when investing in a house in multiple occupation (HMO), or investing via a limited company, the vast majority of people will need to use a specialist lender. However, for a standard buy-to-let purchase, it is worth including mainstream lenders in your mortgage search.

According to MFS: “Specialist lenders deliver greater flexibility and speed than high street comparatives. Unlike high-street banks, they underwrite their loans manually. This allows them to approach each application on a case-by-case basis.”

The sector is reacclimatising

Chris Baguley, Group Channel Development Director at Together, said: “The short, sharp shock in interest rates since the Covid years triggered some cautiousness in the commercial market while investors were trying to predict where the peak would be. With rates settling, while there is still an overall flattening; activity is returning as the sector reacclimatises to the new environment.

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The Future of the UK Property Market: Analysing Interest Rates in 2024 

Introduction 

The UK property market has always been a significant focus for investors, homeowners, and renters alike. As we look ahead to the year 2024, one crucial factor that will shape the market is interest rates. In this blog post, we will delve into the potential impact of interest rates on the UK property market, exploring the key factors driving their movement and what this might mean for buyers, sellers, and investors. 

Understanding Interest Rates 

Before we discuss the future of interest rates, it’s important to grasp their significance in the property market. Interest rates are set by the Bank of England to control inflation and influence economic growth. When interest rates are low, borrowing becomes cheaper, leading to increased demand in the property market. Conversely, high interest rates can deter potential buyers due to increased mortgage costs. Therefore, fluctuations in interest rates can significantly impact the property market’s dynamics. 

Factors Influencing Interest Rates 

Several factors influence interest rates, and understanding these can help predict their movement in 2024. The Bank of England’s Monetary Policy Committee (MPC) considers various economic indicators, such as inflation, GDP growth, and employment rates. Additionally, external factors like global economic conditions and political events can also affect interest rates. As we approach 2024, the Committee will closely monitor these indicators and adjust rates accordingly. 

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The Impact of Interest Rates on Buyers 

Interest rates play a crucial role in determining affordability for potential buyers. In a low-interest-rate environment, mortgage repayments are more manageable, allowing buyers to enter the market and potentially drive up property prices. However, if interest rates rise significantly in 2024, mortgage repayments may become less affordable, leading to reduced demand and potentially stabilizing or lowering property prices. 

The Impact of Interest Rates on Sellers 

Higher interest rates can also affect sellers in the property market. If mortgage costs increase, potential buyers may be deterred, leading to a decrease in demand for properties. This could result in longer selling times and potentially lower sale prices. On the other hand, if interest rates remain low or decrease, sellers may benefit from increased demand and potentially higher sale prices. 

The Impact of Interest Rates on Investors 

Interest rates can significantly impact property investors. Low interest rates make borrowing cheaper, allowing investors to finance their purchases more affordably. This can lead to increased investment activity in the property market. However, if interest rates rise, investors may face higher financing costs, potentially reducing their purchasing power and limiting investment opportunities. 

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Predictions for 2024 

While it is challenging to predict future interest rates with certainty, experts suggest that interest rates in 2024 will largely depend on economic conditions. If the UK economy experiences strong growth, it is likely that interest rates will gradually rise. Conversely, if economic recovery is slower, interest rates are likely to remain low or even decrease further. The Bank of England will continue to monitor economic indicators and adjust rates accordingly to maintain stability. 

Conclusion 

The future of the UK property market in 2024 will be heavily influenced by interest rates. As buyers, sellers, and investors navigate these market dynamics, it is crucial to stay informed about the factors driving interest rate movements. By understanding the impact of interest rates on affordability, demand, and investment opportunities, individuals can make informed decisions in the dynamic landscape of the UK property market in 2024. 

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UK house prices rise for third straight month as mortgage rates fall

Nationwide says average property price was £258,557 in November, £5,231 down on same month last year

UK house prices rose for a third consecutive month in November as the market responded to hopes that mortgage rate costs had peaked.

Nationwide, the UK’s biggest building society, said prices rose 0.2% month on month in November, after a 0.9% rise in October and a 0.1% rise in September. Economists polled by Reuters had forecast a 0.4% fall in prices in November.

It is the first time that homeowners have seen the value of their property rise at least three months in a row since the summer of last year.

On an annual basis, prices were down 2% in November, the best in nine months and after a 3.3% year-on-year fall in October.

The average price of a home was £258,557 in November, £5,231 down on the value of a typical property in the same month last year.

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Nationwide said the improvement in the market has followed the view that the Bank of England’s move to hold the base interest rate at 5.25%, after a run of 14 consecutive increases, means soaring mortgage costs will start to drop, fuelling more activity in the housing market.

“There has been a significant change in market expectations for the future path of the bank rate in recent months which, if sustained, could provide much-needed support for housing market activity,” said Robert Gardner, the chief economist at Nationwide. “By the end of November this had shifted to a view the rates have now peaked and that they will be lowered to about 3.5% in the years ahead.”

In November, the Bank of England kept the rate at 5.25% for a second time, albeit still at a 15-year high, which has helped to push some two- and five-year fixed mortgage rates back down to below 5% – down from peak levels of more than 6%.

Last month, the sharp drop in inflation from 6.7% to 4.6% fuelled hopes that the Bank of England might start cutting rates next year.

However, earlier this week Andrew Bailey, the governor of the Bank of England, said there was no immediate prospect of an interest rate cut as the Bank faces a tough battle to bring inflation back to its 2% target.

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Mark Harris, the chief executive of the mortgage broker SPF, said: “The direction of travel for new mortgage rates is downwards, with a number of lenders making reductions this past week and bringing some early Christmas cheer to borrowers.

“However, while interest rates appear to have peaked, those hoping base rate will move swiftly downwards again to the rock-bottom levels of the recent past are likely to be disappointed. Pricing is higher than borrowers have grown used to over the years, meaning those buyers relying on mortgages are more price-sensitive on the back of ongoing affordability concerns.”

By Mark Sweney

Source: The Guardian

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UK house prices rise at slowest post-summer rate since 2008 crash

UK house prices are rising at the slowest rate for this time of year since the 2008 financial crash, according to new data that highlights the impact on the housing market of higher interest rates.

The average new asking price rose by 0.5% in the month to 7 October to £368,231, but it was the smallest post-summer bump since the 2008 crisis, according to property website Rightmove.

House prices dropped by 0.8% in the 12 months to early October as the lower activity fed through, Rightmove said, while the number of agreed house sales fell by 17% compared with a year earlier.

Separate figures from Halifax bank earlier this month showed the fastest fall in annual house prices in 14 years in September.

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The Bank of England had raised interest rates at 14 consecutive rate-setting meetings up until last month as it tried to tame inflation. In September, its monetary policy committee finally voted to hold its key rate at 5.25%, but that is still the highest rate since the financial crisis of 2008.

Tim Bannister, who studies property data for Rightmove, said asking prices usually rise after the end of the summer holidays, but that the increase this year was “much more subdued” as sellers adjusted to the weaker market.

He said that estate agents were describing the market as “the most price-sensitive ever”. The number of people enquiring about each property advertised on its website was still up by 8% on 2019, before the Covid-19 pandemic.

Renters are being squeezed as landlords try to pass on their higher mortgage costs, amid a continued shortage in housing across much of the country. Separate data from estate agent Hamptons showed that the average rent in Great Britain rose to £1,325 per month in September, up from £1,186 a year earlier.

The steepest rent increases were in outer London, where prices rose by 16.2% on average, compared with 5.2% in Wales, the region with the slowest rental price growth. Overall, rents in Great Britain rose by an average of 11.7%.

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Mortgage interest costs for landlords rose by 40% in the year to August, to £15bn a year, according to Hamptons analysis of data from lobby group UK Finance and the Bank of England. The company said interest costs could hit £20bn a year within the next two years, as more and more landlords come to the end of their fixed-rate deals.

Aneisha Beveridge, Hamptons’s head of research, said: “Even if there are no further rate hikes by the Bank of England, we could see the amount of mortgage interest paid by landlords exceed £20bn over the next two years. This has the potential to eat up just over half the amount mortgaged landlords receive in rent.”

By Jasper Jolly

Source: The Guardian

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The net zero U-turn is bad news for the housing market

This time last year, former prime minister Liz Truss’s “mini” Budget sent interest rates soaring, thereby compounding the pain the housing market was already feeling due to rising rates. One year later, her predecessor also wants to shake up the housing market – albeit Rishi Sunak’s approach is at least intentional.

In a speech last week, the prime minister moved the deadline for the phase-out of gas boilers in new homes from 2025 to 2035 and scrapped planned energy efficiency targets for rental properties.

This is bad news for the climate and the whole housing market. Sunak presented the phase-out of gas boilers as saving homeowners money. That may be true, but it looks more like the government avoiding hard work. In 2020, it pledged £1.5bn in order to fund the replacement of gas boilers with heat pumps. This was abandoned a year later, with the National Audit Office blaming rushed implementation, delays and a lack of certified tradespeople able to do the work. The government has since replaced that scheme with other, less ambitious ones.

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Meanwhile, heat pumps remain prohibitively expensive and very hard to come by. As such, the question of how gas boilers will eventually be replaced remains open. Homeowners are left none the wiser on whether to save up for a heat pump or to factor the cost of replacing a boiler into their decision to buy a home. By kicking the can down the road, the government seems to be hoping that it can ignore the issue. For homeowners, it does not go away.

How does this impact the UK’s housebuilders? On the one hand, they have past form in lobbying against green policies. On the other hand, some – such as Redrow (RDW) – had already made strides towards phasing out gas boilers in their new homes. With the government backtracking, they now need to consider whether to change course.

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The scrapping of energy efficiency certificate (EPC) requirements for buy-to-let landlords will also impact the housing market. According to the old policy, new tenancies from 2025 would only be possible on properties with an EPC of C or higher. From 2028, this would have applied to existing tenancies, too. Not anymore.

As with housebuilders, buy-to-let landlords will have two different reactions to this. On the one hand, the move saves them money in the short term. On the other hand, the lack of clarity on the direction of travel will be frustrating for those planning long-term – especially for those who have already spent money on improving their rental properties.

It is hard to see how the decision benefits renters, either. The prime minister said that the costs of improving energy efficiency could have been passed onto renters in the form of higher rent. But this ignores the cost that will now certainly be passed on to renters by not improving the energy efficiency of homes – from concrete costs such as higher energy bills to social costs like poorer quality of life.

What housebuilders, landlords and renters need more than anything else is clarity. But with this U-turn and a general election on the horizon, it’s even harder than usual to know what the UK’s housing stock will look like in five years’ time – or what anyone should be doing about it.

By Mitchell Labiak

Source: Investors’ Chronicle

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Average UK house deposit passes £36k

In the ever-changing housing market, these latest findings could come as disappointing news to many first-time buyers, especially with 37% already pessimistic about their chances of getting a foot on the property ladder.

However, deposit figures aren’t as far out of reach in some UK cities, and there are ways first-time buyers can put down a lower deposit, helping them get onto the property ladder.

This new data reveals which key cities across the UK have substantial average deposits, and which are more affordable. Unsurprisingly, London tops the list for the most expensive average deposit across all cities (£70,341).

On the other hand, first-time buyers may be shocked to learn that, on average, it’s actually cheaper to buy a home in the UK’s second biggest city, Birmingham (£27,437), in comparison to Cardiff (£29,353), Manchester (£29,953) and Bristol (£39,743).

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London: £70,341

London, is a world-renowned metropolis renowned for its rich history, culture and diversity. The city offers a never-ending list of opportunities and experiences which make it an exciting place to call home. But, with the average house deposit being a staggering £70,341, it may seem unachievable for most first-time buyers to buy a property here.

Bristol: £39,743

Not only does Bristol offer historic charm, but it’s also a vibrant city with plenty to do – including a lively food and music scene, plenty of shopping spots and lots of fun attractions. With a more affordable property market compared to London, Bristol may be a good choice for first-time buyers to enter the housing market. However, the average deposit here is still higher than the overall national average.

Manchester: £29,953

Over the past few years, Manchester has gained popularity amongst young adults and become the hotspot for individuals seeking an exciting and affordable lifestyle. Manchester offers a diverse range of attractions, from its iconic music scene to its world-class museums and sporting events.

The lower average deposit combined with the amenities and job opportunities available makes it an ideal place for first-time buyers to call home.

Cardiff: £29,353

Cardiff, the beautiful capital of Wales, offers a blend of historical significance and modern amenities that make it an appealing place to both live and buy a first home. With various eateries, galleries and bars as well as its scenic coastline, there’s always something exciting to do.

With the average deposit here being over £5,000 less than the national average, Cardiff is a great option for first-time buyers.

Birmingham: £27,437

Despite being the second largest city in the UK, the average deposit needed to buy a home in Birmingham is a lot less than some other major UK cities.

Over the years, Birmingham has transformed into a thriving hub of culture, innovation and opportunity. The city’s diverse neighbourhoods offer a range of experiences, from the charm of the Jewellery Quarter to the modern architecture of Brindley Place. With its impressive variety of restaurants, shops and entertainment venues, this city caters to a variety of interests and lifestyles.

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Sheffield: £24,398

Located in the stunning landscape of South Yorkshire, Sheffield offers a blend of natural beauty, cultural richness and affordability that makes it an appealing city to live in. The “Steel City” presents an attractive housing market with relatively low property prices compared to larger urban cities.

With the average deposit coming in a lot lower than other cities across the UK, Sheffield may be a good option for those looking to get on the property ladder with their first home.

Liverpool: £21,579

Finally, the lowest average deposit out of all the cities compared to this new data is Liverpool. This city captivates visitors and residents alike with its dynamic energy and iconic landmarks. Its affordable housing market also makes it a good option for first-time buyers looking to soak up its proud history and promising future.

These figures have been calculated based on a 10% deposit – the minimum amount most UK banks will accept from first-time buyers.

Jo Winston, Sales and Marketing Director at St. Modwen Homes, says: “We’ve heard from hundreds of people from across the nation who are desperate to buy their first home but feel trapped by the system.

“The cost of living crisis is squeezing people’s finances, meaning there’s less money than ever before left to go towards savings. On top of this, those who are able to put some money away each month are getting very little return on investment because of low savings rates. All of this combined means saving for a large deposit is extremely difficult for many prospective homeowners.

“Our 5% Deposit Contribution has been specifically designed to make buying a new house more affordable, easier and quicker for first-time buyers. By matching the buyer’s 5% deposit, the scheme will enable homeowners to put down a 10% deposit in total, giving them access to a larger pool of mortgage lenders and a wider choice of deals.”

Source: Property Reporter

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Property industry reacts to fall in UK house prices

House prices have dropped 5.3% in the last year, Nationwide’s August house price index released on Friday shows – the biggest fall it has reported since 2009.

The building society said the typical home is now worth £259,153, an annual drop of around £14,600 compared to August 2022.

This represents a larger fall than the 3.8% annual drop Nationwide reported in July.

Between July and August, the average house price has fallen by 0.8% or £1,675 on a seasonally adjusted basis, it said.

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Industry reactions:

Simon Gerrard, managing director of Martyn Gerrard, said: “The economic pressures caused by interest rates hikes are continuing to impact the direction of the housing market, as demonstrated by today’s figures. However, whilst buyer confidence may still not be at its strongest, demand for homes and interest in buying remains high. We’re continuing to see high levels of enquiries, and hopefully if the base rate is now at or nearing its peak, confidence and some urgency will fuel the market.

“We have seen the seasonal patterns to demand return, and August is typically a slower month as people prioritise their Summer holidays over house hunting, so it’s important to contextualise these figures and bear in mind that active demand is likely to pick up again in September. The recent inflation data is encouraging and suggests that we should be nearing the end of our current interest-rate cycle. Once we see downward pressure on interest rates, I expect we’ll see a lot of pent-up demand released and, as a result, a return to consistent growth for house prices. The final months of this year could see a flurry of activity if the Bank of England begins to bring interest rates down again.

“Once this demand is released, however, we’ll still see the housing market battling the issue of limited supply which has been preventing a properly performing market for decades. Nothing of any substance is being done on this front despite reports this month that one in 50 Londoners are homeless, highlighting the severity of the crisis we’re facing.

“Government moves to allow permitted development for extra floors on blocks of flats are meaningless when councils still have carte blanche to block development on aesthetic grounds, which are completely subjective. The government needs to overhaul our existing planning system, which is not fit for purpose and get Britain building again.

“Instead, it’s displayed more interest in appeasing its NIMBY backbenchers and voting base rather than delivering on housebuilding targets or keeping councils in line. It’s a tired routine of offering catchy soundbite policies that have virtually no substance or impact, which is at the root of the housing crisis. We remain in desperate need of real reform to update our archaic planning system, and only then will we see the property market working as it is supposed to.”

Iain McKenzie, CEO of The Guild of Property Professionals, commented: “Last month saw a bigger decline in house prices than usual for the summer – leaving the average home worth £15,000 less than this time last year.

“The industry has proven resilient to this volatility throughout 2023, with the picture a lot less gloomy than previously forecasted.

“House prices are still well above pre-pandemic levels, but homeowners that haven’t reacted to the changing outlook may find that their property is slower to sell.

“Consult your local estate agent if you are unsure of what your home may be worth, as they should also have a sound idea of what the market is like in your area.

“Cash is king at the moment, with such buyers speeding up the process for sellers – although they usually want more flexibility on the asking price.

“The sluggish rate of mortgage approvals throughout the year has caused a significant decrease in the number of first-time buyers getting their foot on the property ladder.

“All eyes will be on the next few months. Demand usually remains high in the autumn, as potential buyers look to get moved in before the festive season. With sales figures still buoyant, it is unlikely that we will see any sharp falls for the rest of the year.”

Nicky Stevenson, MD at Fine & Country, said: “Mortgage rates are squeezing buyer affordability, leading to lower asking prices and offers, and softening average house price growth.

“Despite the pressure on budgets, people have got used to the higher rate environment, and many homes are now being priced accordingly to attract interest and offers.

“As we come out of the summer, demand is expected to build again, and many sellers are looking to begin marketing their home in September.

“A steady pipeline of sales, coupled with falling inflation and a strong labour market, should help the property market enjoy a soft landing over the coming months.

“A pause in base rate rises is what is really needed to give the market that extra jolt of energy — and hopefully that will become a reality this side of the new year.”

Jeremy Leaf, north London estate agent, commented: “Cash buyers are more dominant in the market as house prices continue to be supported by a shortage of stock and fewer, but more serious, buyers as part of a two-tier market.

“Serious sellers are recognising they may not achieve exactly what was originally anticipated but, bearing in mind that four out of five are also buyers, they‘re concentrating on the difference between the two prices rather than headline figures.

“Those sellers refusing to recognise the new realities and that prices are softening, remain on the market and often have to accept lower than their original valuation in order to eventually achieve that move.”

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Chris Druce, senior research analyst at Knight Frank, said: “The Bank of England’s rate setting decision later this month, and the messaging around it, will be a key moment for the UK housing market.

“If, as believed, we are near the peak of the rate-rising cycle we can expect buyer confidence to improve in the second half of this year, after a challenging period that has seen people’s spending power reduced and activity slow.

“Surety about rates will allow buyers to plan more effectively, although affordability will continue to be stretched and we expect pressure on pricing and transaction volumes to continue through this year and next.

“However, demand should prove more resilient than expected given the shock-absorber effect of strong wage growth, lockdown savings, the availability of longer mortgage terms, flexibility from lenders and the popularity of fixed-rate deals in recent years.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, commented: “Until we see a consistent and more considerable decline in mortgage pricing, buyers relying on mortgages are inevitably going to be more price sensitive in coming months on the back of affordability concerns.

“With another 25 basis points interest rate rise expected from the Bank of England later this month, we are not out of the woods just yet when it comes to rising mortgage costs.

“However, a number of lenders have been reducing their fixed-rate mortgages on the back of better-than-expected inflation news. This has led to a calming of Swap rates, which underpin the pricing of fixed-rate mortgages, after a period of considerable volatility and bodes well for further reductions in coming weeks.”

Jonathan Hopper, CEO of Garrington Property Finders, said: “Hopes that this would be a brief or even gentle reset are fading faster than people’s summer tan lines.

“Instead, much of the property market is going through an increasingly sharp correction, with sellers enduring the fastest fall in average prices since July 2009.

“Meanwhile many would-be buyers are still being prevented from capitalising on the falling prices by the high cost of mortgages – which means that areas they might previously have chosen to buy in have become less affordable even as prices come down.

“The net effect has been a dramatic slowdown in the number of homes being bought and sold. The number of purchases completed in the first half of 2023 was down nearly a fifth on its pre-pandemic level, and was almost 40% below the 2021 level.

“On the property frontline we’re seeing a rapid unravelling of the post-lockdown boom. With interest rates unlikely to come down any time soon, buyers who rely on a mortgage will continue to see their affordability stretched and this will prompt some to look for smaller homes in cheaper areas.

“At the top end of the market, cash buyers are sensing that now is a good time to strike – and many are coming out of the woodwork to play their increasingly strong hand.

“While all buyers are wary of paying a price today that could be lower tomorrow as the market settles further, this is unquestionably a buyer’s market – and sellers are increasingly willing to accept below asking price offers from committed, proceedable buyers.”

Giles Mackay, founder of UPSTIX, added: “The continued decline in house prices has not been met by an uptick in sales, which may leave prospective sellers worried about their ability to transact without dropping prices further. In fact, according to Rightmove’s data earlier last week, volumes are still down 15 percent on 2019 levels.

“In a cool market where prices still remain significantly above pre-pandemic levels, those looking to sell should prioritise speed if they want to maximise returns.”

By Marc Da Silva

Source: Property Industry Eye

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Halifax to lower five-year fixed rates

Halifax will lower select homebuyer five-year fixed rates, which includes first-time buyer, new build, large loans and affordable housing and green home products.

The changes will come into force from Monday 21 August.

An example of rate changes includes its no-fee five-year fixed rate at 80 per cent loan to value (LTV) will decrease by 0.11 per cent to 5.48 per cent.

The lender’s no-fee five-year fixed rate at 85 per cent LTV will go down by 0.12 per cent to 5.48 per cent.

Halifax’s five-year fixed rate at 80 per cent LTV will reduce by 0.11 per cent to 5.37 per cent and at 85 per cent LTV pricing will fall by 0.12 per cent to 5.37 per cent as well.

The loans are available between £25,000 and £1m.

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A positive boost for the market

Jamie Lennox, director at Dimora Mortgages, said that it was “great to see the UK’s biggest mortgage lender return with a further reduction on selected products”.

“This is a positive boost for the mortgage and property market given that markets are baking in further base rate increases following core inflation remaining sticky.

“It’s likely that the speed at which rates went up caused a firm halt in the number of new applications being received and we may now see lenders chasing their tails in the months to come to try and make up for being behind on their targets for the year. Only time will tell, but we hope to see more to follow,” he added.

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Peter Stamford, director and lead adviser at Moor Mortgages, said: “Halifax is making assertive moves to bolster its mortgage portfolio, a likely response to the subdued business volumes in recent months.

“With markets anticipating further base rate hikes due to persistent core inflation, the UK’s leading mortgage lender’s rate reductions may be short-lived. As the industry sees a slowdown in new applications, other lenders might soon follow Halifax’s lead. Borrowers should seize these opportunities, but with caution, as the financial climate remains unpredictable.”

By Anna Sagar

Source: Mortgage Solutions