Homebuyer demand levels drop in Q3, with a 5% decline since Q2 (7% drop compared to last year), as economic pressures and the increased cost of borrowing makes customers reconsider – GetAgent.
New buyer interest falls for fifth month in a row in September amid deteriorating macro conditions and the outlook for interest rates – Royal Institution of Chartered Surveyors (Rics).
Annual mortgage payments up 19% since last year coming to £16,629, representing the second largest increase in household bills after annual energy bills, which have risen 54% from £1,277 to£1,971 per month – Revolution Brokers.
Mortgage payments set to rise by £300 per month by 2023 for those coming to the end of their mortgage deal, with mortgage rates forecast to climb as high as 6% – Octane Capital.
UK mortgage borrowers face massive squeeze given that “An increase in mortgage rates to 6% would take repayment affordability above the level immediately prior to the 2007 downturn and just below the peak level in 1990. With the rapid rise in mortgage rates, worsening outlook for the economy, cost of living crisis, and, potentially, large cuts in public spending, the possible drivers of forced sales are all present.” – Neal Hudson, housing analyst.
Markets revise down interest rate projections following Government U-turn on the 45p tax rate and are now anticipating interest rates of between 5.5% and 5.75% next year rather 6%.
Surge in mortgage arrears and repossessions ‘unavoidable’ but banks will survive these losses due to significant capital buffers, even with a 33% drop in house prices and an unemployment rate of 12% – Capital Economics.
40% of property sales fell through before completion in Q3 - a 9% increase in failures over the past three months. According to Quick Move Now, the main reasons were:
41% Changed mind about the purchase
24% Unable to get a mortgage
18% Due to slow progress
12% Issues with the property survey
September second busiest month for mortgage searches with over 100,000 searches on Twenty7Tec’s platform in one day alone. Fixed rate deals; green mortgages, self-employed, retired and properties valued at over £1m all featured prominently whilst first time buyers queries fell to their lowest level since May 2020.
Cost of living crisis 'pushing vulnerable people to breaking point’. A third of adults who were already vulnerable have seen their mental health worsen in the last 12months during the cost of living crisis, potentially making them less able to make financial decisions – Vulnerability Registration Service.
Foreign travel chaos set to boost UK holiday let demand. On-going concerns about COVID restrictions and a weak pound making foreign holidays more expensive are also factors – Jean Errington, Harpenden Building Society.
Legal & General calls for mortgage industry collaboration as Help to Buy scheme ends on October 31st. The scheme has supported close to 360,000 new build housing transactions since it launched in 2013, according to Government figures.
Lenders urge government to extend Mortgage Guarantee Scheme in a meeting with former Chancellor, Kwasi Kwarteng. The scheme, which sees the Government underwrite any losses incurred on mortgages above 80% of the purchase price of a property, is due to expire at the end of the year.
78% of homeowners still confident about housing market despite the current economic uncertainty. In the poll by estate agency Yopa, 57% of respondents expect house prices to rise over the next year.
Housing market sentiment continues to fall with just 15% of people thinking now is a good time to buy a property, down from 26% a year ago. Affordability (65%), raising a deposit (57%) and having access to a large enough mortgage (48%) were the top concerns – Building Societies Association.
Access FS offers administrative help for brokers freeing up to 70% of a broker’s time, with some claiming to increase the amount of mortgage and protection business they write by three times since the scheme has been in place.
Mortgages are ‘ticking time bomb’ as 3,300 fixes end every day across October and November, leaving borrowers with no choice but to take out a more expensive product – Liberal Democrats.
One in two homeowners reaching end of fixed-term deals within the next three years. 89% are worried about rising interest rates and their mortgage payments increasing – Comparethemarket.
Spike in over 40s taking out 35-year mortgages with 3,039 sales projected this year. This represents a 39% increase compared to 2021 when 2,191 mortgages of this type were sold and a 433% increase from 2020 when only 570 were sold. Although longer terms help reduce repayments, this could have a detrimental effect on their quality of life in retirement warns Quilter.
Newbury Building Society launches Cost-of-Living Support offering financial donations to organisations supporting people in Berkshire, Hampshire, and Oxfordshire. The Society has also launched a hub on their website, where their members can access guidance, support, and links to useful cost of living resources.
Housing is now at its least affordable since records began with research by Leeds Building Society revealing:
In 1980, the average UK house price was around £21,000 and mortgage costs accounted for 11.3% of disposable income. Today, those figures are around £292,000 and 45.1% respectively.
The average home currently costs 9.1 times the average local wage compared to 3.5 in 1997.
Home ownership amongst 25–34-year-olds has collapsed from 65% in 1996 to 27% in 2016, giving them the label of ‘generation rent’.
Average monthly cost of a variable rate mortgage up 13.3% so far this year from £990 to £1,093, after adjusting for inflation – Revolution Brokers.
Average time to sell a home fastest for seven years in 2021 at 52 days. The seven-year average is 63 days – HomeOwners Alliance.
Broker market to jump 12% to £2bn by 2025 despite forecasts of a slowing housing market. The market has grown strongly, recently aided by the pandemic, to make up 5,580 mortgage broker businesses, generating a total market value of £1.78bn, netting each business an average annual revenue of £318,584. – Octane Capital.
Five million households set for average mortgage bill increases of £5,100 by end of 2024 with £1,200 of that reflecting higher expectations of interest rate rises since the ‘mini-budget’ – Resolution Foundation.
91% of brokers believe mainstream mortgage lenders have marginalised self-employed customers by tightening criteria. The same survey revealed that 81% of brokers believe that generally clients’ incomes have become more complex over the last 12 months – United Trust Bank.
Mortgage Broker Tools (MBT) offers mortgage helpdesk giving immediate telephone access to experts able to research the best solutions for difficult cases. The helpdesk complements the firm’s Affordability digital research platform.
Borrowers at risk of losing mortgage offers as delays plague industry with ‘Down valuations’, conveyancing delays and complex property chains among the issues threatening to derail transactions. Lenders also appear to be encouraging cashback options rather than free legals, which often have some of the slowest turnarounds.
Stamp duty payments pass £12bn to hit record – up £3.2bn compared to the same period last year, but against the backdrop of the stamp duty holiday which lasted until September 2021.
Mortgage repayments eat up nearly a quarter of household income rising from 16% to 22% since the start of the year – Octane Capital.
One in four in financial difficulty according to the FCA with 4.2 million people missing bills or loan payments in at least three of the previous six months (up from 3.8 million in 2020) and a further 7.8 million people claiming that bills are a heavy burden (compared to 2.5 million in 2020).
Number of buy-to-let companies passes 300,000 doubling since 2017 and primarily driven by existing landlords moving properties from personal to company names to reap the tax benefits – Hamptons estate agents.
Rising number of adults struggle with rent or mortgage payments up from 26% in Q2 to 30% in Q3, with the option of downsising to reduce costs becoming a consideration for some.
Mortgage Climate Action Group to host green- focused BTL webinar aimed at brokers, as landlords prepare for a phased introduction of the minimum C-rated EPC requirements for new properties in 2025, and existing properties from 2028.
New buyer demand slows "like the Christmas slowdown has come early“ as rising mortgage rates dampen demand. Although the drop has been evident across all parts of the UK, the largest declines have been seen in the South East (-40%) and the West Midlands (-38%) – Zoopla.
FTBs see deposits quadrupling to £81,510 under 6.5% fixes on a typical home if they want to keep their repayments at the same level as when average mortgage rates were 2%.
