Category: Mortgage

The value of gross mortgage lending rose to £22.2bn in May, the fourth consecutive month to see an increase, data from the central bank showed.

The Bank of England (BoE) Money and Credit report showed this was up from £21.1bn in April and higher than the six-month average of £18.7bn. 

Gross mortgage repayments also rose from £19.3bn to £20.5bn from April to May. 

The net borrowing of mortgage debt fell from £2.2bn to £1.2bn month-on-month.

Karen Noye, mortgage expert at Quilter, said the decrease in net mortgage borrowing highlighted the “cautious approach buyers are taking amidst an unpredictable economic outlook and fluctuating mortgage rates”. 

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NatWest has cut selected fixed rate mortgage deals, available direct and through brokers, by up to 0.23 percentage points, effective from tomorrow (2 July), writes Jo Thornhill.

It follows cuts of up to 0.17 percentage points to fixed rate deals by the bank less than two weeks ago.

Among the newly-priced deals is a five-year fixed rate for purchase at 4.34%, or 4.77% over two years. For remortgage, five-year rates are available at 4.41%, or 4.81% over two years. These deals are all available at 60% loan to value and come with a £995 product fee.

NatWest has also cut rates on its product transfer deals (those for existing borrowers looking for a new rate). For these customers the bank is offering a five-year fixed rate at 4.46% or a two-year rate at 4.86%. Both deals are at 60% LTV and charge a £995 fee.

Selected buy-to-let (BTL) deals at NatWest have been cut by up to 0.18 percentage points. Deals for BTL remortgage start from 4.81% fixed over two years, or 4.66% fixed over five years. These deals are available at a 60% loan to value and come with a £3,499 fee. BTL deals with a lower product fee are available at higher rates.

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The Bank of England held its Bank Rate at 5.25% in June, as was widely expected. It was the seventh time in a row the Rate has been frozen since it rose to its current level in August 2023. It had previously undergone 14 consecutive rises (between December 2021, when it stood at just 0.1%, and last August).

The next interest rate announcement by the Bank’s Monetary Policy Committee (MPC) will be on 1 August at noon. The market is predicting that the Bank Rate will fall to 5% at that point.

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The monthly mortgage of a first-time buyer has soared by more than 60% to exceed £1,000 a month since the last general election, according to figures that underline the financial challenge facing Britons trying to gain a foothold on the housing ladder.

Over the last five years, the average mortgage payment for a typical first-time buyer in Great Britain has risen by 61% to £1,075 a month, up from £667 in 2019, according to the property website Rightmove.

The increase of about £400 a month is linked to the march of house prices and interest rates, which have heaped financial pressure on borrowers, whose average wages have grown by just 27% over the same period. The financial squeeze has forced many younger borrowers to either look for smaller properties or to take out an ultra-long mortgage.

“As rates have increased over the last five years, the amount that a typical first-time buyer is paying each month on a mortgage has outstripped the pace of earning growth,” said Tim Bannister, a Rightmove property expert. “Some first-time buyers are looking at extending their mortgage terms to 30 or 35 years to lower monthly payments, or looking at cheaper homes for sale so that they need to borrow less.”

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Someone newly getting onto the property ladder can expect to pay around £400 more per month for their mortgage than five years ago, analysis suggests.

Calculations by property website Rightmove suggest the average first-time buyer mortgage payment has risen by 61% since the last General Election year of 2019, from £667 to £1,075 per month.

The calculations made various assumptions, including that first-time buyers would have a 20% deposit to put down, that their mortgage term would last 25 years and that they were taking out a five-year fixed-rate mortgage on an average rate.

Rightmove also used average asking prices of a typical first-time buyer homes, with two bedrooms or fewer, for the research.

Across Britain, first-time buyers now face paying £227,757 for a home, an amount which has jumped by nearly a fifth (19%) since 2019, Rightmove said.

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Many of us envisage retirement as a peaceful winding down after several decades of hard work.

But an increasing number of mortgage holders face having to put their relaxation on ice as they’re left with no choice but to work past their pension age to pay off long-term mortgages.

Homeowners are still reeling from painful interest rate increases by the Bank of England that pushed high street mortgage rates as high as 6.8%. Those who have taken out or renewed their mortgage in the past year have likely had their monthly payments rocket.

A recent BoE report revealed nearly half of all mortgages issued in the last three months of 2023 were for 30 years or longer, while two in five were issued to borrowers who would be past state pension age at the end of their mortgage term.

Different figures from UK Finance show 41,580 first-time buyers took out mortgages with terms of 30 years or more in the last quarter of 2023, of which around 15,700 (38%) were longer than 35 years.

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This tip works because you end up reducing the amount of money you have to pay in interest, which can build up over the years. But by making overpayments, you can cut down the extra cash you need to pay and reduce the length of your mortgage term.

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Homebuyers and remortgagers spend more time choosing home appliances than digesting mortgage deals, a study claims, as homeowners report the fast-paced mortgage market is making them stressed.

A sixth of homeowners said they felt pressured into making a quick mortgage decision due to the rapidly changing market, according to research by Smart Money People, with 57 per cent reporting that they felt stressed as a result.

A quarter of buyers and remortgagers said the mortgage process had left them confused.

On average, homeowners spent less than half a day looking at mortgage options before diving into a deal, Smart Money People said – this is less time than they spend considering which coffee machine or air fryer to buy.

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Rightmove house price index.

Data from the property website shows that the average price of a house being listed dropped by just £21 in June — statistically giving a zero percent change on the previous month.

This means the average asking price of a property for sale is now £375,110, broadly the same as May, which was a record high. Rightmove says this follows seasonal patterns of prices stagnating at this time of year, with election uncertainty adding to this summer lull.

This national average masks considerable regional differences though. Rightmove says there is stronger growth in northern regions where property prices are lower. Five of the six cheapest regions have reached new price records, while the higher-priced East of England and London lag behind, according to its data.

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