UK Mortgage & Property Related News
Average monthly rents in Great Britain have increased by £74 in the last year, as landlords continue to exit the market.
A new report shows that landlords are buying far fewer homes than before, resulting in tenants having less choice and facing higher costs.
Read on for more about what’s happening to rent prices, and how the new government plans to overhaul the rented sector.
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The housing market experienced a surge in activity following the Bank of England’s recent decision to cut interest rates, according to a leading property website.
Estate agents reported a 19% jump in enquiries about properties for sale after 1 August, when compared with the same period last year, research by Rightmove found.
It came after the Bank cut rates for the first time in more than four years from 5.25% to 5%.
Rightmove’s Tim Bannister said it was clear that the Bank’s decision had “sparked a welcome late summer boost in buyer activity”.
He added: “While mortgage rates aren’t yet substantially lower since the rate cut, the fact that the long-hoped-for first cut has finally arrived, and mortgage rates are heading downwards, is positive for home-mover sentiment.
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People aiming to profit from their property could be making a significant and costly error in how they calculate their income.
Real estate is often viewed as one of the most valuable investments, especially if you plan to rent out the property, but a common oversight can lead to a hefty cost in the future, as one expert has pointed out.
Former financial advisor Joe Saul-Sehy, speaking on the Afford Anything podcast with Paula Pant, warned that first-time buyers frequently misjudge their gross and net income from the property because they neglect to set aside an emergency fund for it.
He advised landlords to allocate some of their rental income for future maintenance, cautioning: “For people squeezing as much water out of that sponge as they can get, (they) might also be robbing that account, which is a mistake.”
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Lower mortgage costs and more interest rate cuts could fuel a rise in house prices for the rest of this year, Halifax has said.
The mortgage lender’s prediction came after property prices ticked up in July following a flat few months.
Halifax said recent mortgage rate drops were “encouraging” for first-time buyers, those moving along the housing ladder or those refinancing.
But it warned affordability challenges and lack of available properties still posed problems for buyers.
“Against the backdrop of lower mortgage rates and potential further [Bank of England] base rate reductions, we anticipate house prices to continue a modest upward trend throughout the remainder of this year,” Amanda Bryden, head of mortgages at Halifax said.
Last week the Bank of England lowered interest rates to 5% – the first cut since the start of the pandemic in March 2020, but its governor warned not to expect a flurry of further reductions.
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The Financial Conduct Authority (FCA) has secured an order of £4m against an unauthorised mortgage broker firm and its associates who the regulator said, “exploited vulnerable consumers”.
The judgment found that the defendants arranged high interest, “unaffordable” bridging loans for people who were about to be evicted from their homes. In some cases, the defendants bought homes from the people facing repossession for less than valued, then rented the properties back to them.
It was found that the firm London Property Investments (LPI) arranged mortgages while NPI Holdings Limited (NPI) bought properties and rented them back to the sellers, both without regulatory authorisation. Daniel Stevens, the director of LPI and NPI, and his father, Tony Stevens, were also found liable.
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Successive tax raids on buy-to-let investors have fuelled Britain’s rental crisis, the boss of Foxtons has said.
Guy Gittins, who heads up the London-focused estate agent, said private landlords have been driven away by a dearth of government incentives, which has reduced the number of available properties to rent.
The UK’s housing crisis has only worsened since the pandemic, he said, prompting the recent surge in rental costs.
According to Mr Gittins, the previous Conservative government “created an environment that was not attractive or profitable” for new landlords to enter the market.
He said: “It needs to be taken very seriously. We need anything that will encourage people back into the private rented sector.
“Ultimately, the UK needs tens of thousands, if not hundreds of thousands, of extra rental [homes] to manage the price growth and make sure it is tempered as much as possible in the medium term.”
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Only one in eight potential first-time buyers can afford the average starter property in their area, new analysis has revealed.
High house prices, increasing living costs, insufficient savings, rising rents and mortgage rates have all combined to push home ownership out of reach for many young people, according to the study by the owner of Skipton Building Society and analysts at Oxford Economics.
It revealed almost four in every five potential first-time buyers have insufficient savings for the deposit needed to get onto the property ladder in their area.
The challenge is greatest for potential first-time buyer households in the bottom 25 per cent of earners – those earning £22,850 or less a year.
For these first-time buyer households, fewer than one in 100 can afford to take the first step onto the property ladder in their local area.
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As many as 320,000 UK adults have been pushed into poverty by soaring mortgage costs after the sharpest increase in interest rates since the 1980s, a leading thinktank has said.
Highlighting the damage caused by Britain’s exploding mortgage timebomb, the Institute for Fiscal Studies (IFS) said individuals who needed to renew their home loans or take out new ones in the past two years had experienced a sharp fall in their disposable income.
It said some households were paying thousands of pounds more in additional mortgage payments, in a development that was likely to have driven up poverty rates among mortgagors by 1.4 percentage points between December 2021 and December 2023.
It said this jump in relative poverty – defined as people living in households with income below 60% of the median – was the equivalent of 320,000 more adults falling below the breadline.
Millions of homeowners have faced a leap in borrowing costs after 14 consecutive increases in the Bank of England base rate from a record low of 0.1% in December 2021 to 5.25%, where it sits now, in its most aggressive assault on inflation for four decades.
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The Renters (Reform) Bill is one of the most significant pieces of legislation for private renters and landlords in the past 30 years. First introduced to parliament on 17 May 2023, the Bill went through the House of Commons for the final time at the end of April 2024.
The Bill is now in the House of Lords and will face another five stages before it will enter Royal Assent and become law.
The Renters (Reform) bill has generated diverse responses from MPs, tenants, landlords, and letting agents. The main headline in the media has been the proposed abolition of Section 21 (so-called “no-fault” evictions).
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The number of Britons “going bust” is up by a third on the same month last year against the background of mortgage hikes and the cost of living crisis.
Personal insolvencies in June were 10,395, which was up by 10.3 percent on May and by 32.9 percent on the same month last year.
High interest rates, which have pushed up the cost of mortgage repayments, and the fact more people are relying on credit cards to cover essentials, are seen as factors behind the increase.
The main driver of the increase in personal insolvencies is a rise in Debt Relief Order (DRO) numbers, which hit their highest level since January 2021 following the removal of the fee to apply. There has also been a rise in IVAs – Individual Voluntary Arrangements.
A DRO is an option for people in debt where they owe less than £50,000, do not own their own house, do not have any assets of value and not much spare income.
Individuals need to speak to a special DRO adviser, who will provide help to make an application to the official receiver.
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