Building societies remain open for mortgage business despite current volatility. With around 80% of its mortgage lending from retail savings, they will be able to continue to provide mortgages as they did following the financial crisis in 2007/08 – BSA.
TSB moves stress rates to 8% for resi loans and 7% for FTBs “due to market expectations of future interest rates” following volatility in the sterling funding market after the tax-cutting mini-Budget.
Tightening stress tests will leave BTL ‘dead in the water’ according to some brokers. The Mortgage Works began applying a minimum stress rate of 8.49% on all new buy-to-let applications as an interim measure (up from 5%) and follows similar hikes by lenders including Natwest and TSB.
Rising rates drive buy-to-let investors away from London as the capital returned the weakest returns of any region in England and Wales with an average gross yield of 4.9% – Hamptons.
UK lenders return to market with mortgage rates near 6% following turbulence in the UK government bond market in the wake of September’s mini budget. Barclays, Skipton Building Society, NatWest, Virgin Money and Nationwide are among the lenders to increase rates on new mortgage deals.
Mortgage product choice slowly recovers as rates breach 6%. There were 2,371 residential mortgages on the market as of 5th October - 113 more than the 12-year low of 2,258 deals following the mini budget. However, as lenders return to the market, average two-year fix rates reached 6.07% and five-year fix 5.97% – Moneyfacts.
Two- and five-year prices hit levels 'not seen in over a decade’ as the average rate for a two-, three-, and five-year fix all shot past 6% at the start of October, with the 10-year average price not far behind – Moneyfacts.
Economists expect 100bps rise on November 3rd taking the base from 2.25% to 3.25%, with interest rates projected to hit 5.7% by June next year.
£160.4m of second charge lending in September – the third-highest monthly lending figure of 2022 albeit a 3.63% decrease on August’s record-breaking £166.5m – Loans Warehouse.
Mortgage refinancing could rise 40% next year to £100bn, as customers are hit with higher costs due to rate rises linked to inflation – Deutsche Bank.
Max LTV of 50% is future for BTL purchase market as lenders increase stress test levels and rates continue to rise – SimplyBiz Mortgages / Knowledge Bank.
31% of properties receive offer within one hour of viewing compared to just 7% in 2018. One in eight properties received an offer without a viewing – most common amongst 18-34 year olds – MPowered Mortgages.
Average mortgage rates continue to climb with an average 2-year fixed rate priced at 6.3% and 5-year fixed at 6.19%. As of 10th October, there were 2,905 mortgage products available, that’s over a 1,000 less than there were on the morning of the mini-Budget (23rd September) – Moneyfacts.
Mortgage availability and demand set to decline in Q4 with a negative economic outlook, reduced risk appetite and house price expectations cited as the main reasons. Lenders have reported tightening criteria and a rise in defaults in Q3 and expect this to continue in the final quarter – BoE.
UK five-year mortgage rate dips for first time in two weeks on 13th October from 6.32% (a 14 year high) to 6.28% providing a glimmer of hope that the tide will eventually turn on Britain’s home loan chaos.
Criteria index reveals changing borrower circumstances as ‘maximum age at the end of term’ and ‘lenders accepting late / missed payments’ were popular searches in September – Knowledge Bank.
Mortgage rates ‘likely to be slightly lower’ following Hunt mini Budget U-turns with the CEBR now forecasting a BoE peak rate of 5.1% next year rather than 6%. They predict a rise from the current 2.25% to above 3.5% by the end of this year.
Govt. launches £20m green home finance fund to help lenders develop products that provide homeowners with “upfront and affordable capital” to make their homes greener and cheaper to run.
Bridging market enjoys significant growth providing many buyers with short term loans to cover the cost of a property until they sell their own home or allowing time to find the next right deal on longer term finance – SoMo.
Interest rate rise may not be as large as expected with markets pricing in more than may be required. Following the comments by the Deputy Governor at the BoE, markets reduced the predicted chance of a 1% interest rate rise in November from 25% to 15%.
September housing transactions total 112,370 representing a 32% fall on an annual basis and no change compared to the number seen in August 2022. Industry experts point to the spike in transactions last year at the end of the stamp duty holiday which distort the figures and the fact that September sales were actually well above their pre- pandemic levels.
Equity release loans hit record £1.7bn from a total of 13,452 new plans in the third quarter - Equity Release Council.
UK mortgage rates hover near 14-year high as the average two-year fixed-rate home loan dipped slightly to 6.54% after breaching 6.65% for the first time since August 2008. The average five-year fixed- rate deal also fell to 6.41%, but remains at a level not seen since November 2008 – Moneyfacts.
'Major increase' in tracker take-up as they can be half the price of their fixed rate equivalent (the average two-year tracker product was recently 3.69% compared to a 6.5% average two-year fixed rate) and have low or no ERCs. However, with interest rates expected to rise further they remain a gamble.
Lenders cut down mortgage rates from their 14- year high lead by the likes of Virgin Money and HSBC. The Bank of England is predicted to increase the base rate by 0.75% on November 3, with lenders expected to lower their fixed rates after the announcement while pushing up variable ones.
Fixed rate mortgage rates starting to drop from peak with average 2-year fixes at 6.5% and 5-year options at 6.36% near the end of October, both down 0.15% from their peak earlier in the month.
UK mortgage lending to be lowest in over a decade next year after a surge in rates and cost-of- lending squeeze. Total loans for house purchases may total just £11 billion next year, a fraction of the £63 billion expected for 2022 – Ernst & Young.
Purchase approval number drops by 7,633 to 66,789 (from £17.6bn to £15.9bn in value) in September. Remortgage approvals decreased slightly by 410 to 49,122 (£10.7bn to £10.4bn by value) – BoE.
