Tag: finance

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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While mortgage market health is currently being driven by those looking to remortgage, there’s unlikely to be a resurgence in activity until rates start to fall.

This is according to Octane Capital chief executive Jonathan Samuels who points out that gross lending has sunk to its lowest since interest rates increased, driven by a reduction in house purchase lending.

The latest market analysis by Octane Capital has looked at gross mortgage lending by sector and how this figure has changed both quarterly and over the last year.

The analysis of gross mortgage lending figures from the Building Society Association shows that total mortgage lending sat at just £50.5bn during the first quarter of 2024, the lowest level seen since interest rates started to climb in December 2013.

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Mortgage rates are not directly set by the government but rather by lenders influenced from factors such as the Bank of England base rate of interest and general Inflation. Events such as elections can impact interest rates due to the uncertainty.

Data from Mojo Mortgages helps us to understand the changes in mortgage rates since the announcement of the election 2024.

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More homeowners are behind on their mortgages than anytime in the last seven year, according to the Bank of England’s latest data report.

The financial squeeze left from the pandemic and rising cost of living have left many struggling to cover basic expenses, let alone repay debts.

The bank’s report for Q1, 2024 showed that mortgage balances in arrears rose by 4.2 per cent compared to the previous quarter, totalling a staggering £21.3billion.

This is also a staggering 44.5 percent increase from a year earlier.

Additionally, the proportion of total loan balances with arrears relative to all outstanding balances increased from the last quarter from 1.23 per cent to 1.28 per cent.

This is now at the highest level since the final quarter of 2016.

On the other hand, the outstanding value of all residential mortgage loans fell by 0.1 per cent from the previous quarter, marking a 1.4 per cent decrease compared to a year ago.

This saw it falling 1.4 per cent compared to a year ago with the total monetary value of outstanding mortgages currently sitting at £1,654.9bn.

A borrower falls into mortgage arrears when they miss their mortgage payments, which is also recorded on their credit file.

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Those buying a home or remortgaging now have a tough call to make when deciding how long to fix their mortgage rate for.

Last year, most borrowers opted to fix for two years. They believed that interest rates would begin falling during that time, and a shorter fix would allow them to switch to a cheaper rate more quickly. 

However, confidence that rates will fall drastically any time soon appears to be dissipating, meaning that increasing numbers are now choosing to lock in their rate for five years, according to mortgage broker L&C. 

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The Bank of England held its Bank Rate at 5.25% in May, as was widely expected. It was the sixth time in a row the Rate has been frozen since it rose to its current level in August last year. The Rate 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 tomorrow, 20 June. The European Central Bank cut interest rates on 6 June which, in theory, could make a cut from the Bank of England more likely. But the general election on 4 July may delay any cut until the MPC’s next meeting in August.

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Experts say Labour’s plan to make the mortgage guarantee scheme is a good first step, but doesn’t address key issues first-time buyers face.

Labour announced that it would make the mortgage guarantee scheme permanent, noting that it would help a further 80,000 young people on to the property ladder.

The mortgage guarantee scheme was launched in 2021 and was supposed to end in December 2023, but was extended in last year’s Autumn Budget to 2025.

Since the scheme went live, 42,387 mortgages have been completed through the scheme. This accounts for 1.3% of all residential mortgage completions, and 85% of the purchases were made by first-time buyers.

Kate Davies, executive director of Intermediary Mortgage Lenders Association (IMLA), said that a shortage of 95% loan-to-value (LTV) mortgages was “not the issue in today’s market”, with more than 300 deals available at this tier currently.

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Labour says it will make permanent a scheme designed to ensure low-deposit mortgages are available for first-time buyers, if it wins the general election.

The mortgage guarantee scheme was introduced by the Conservatives in 2021 when Rishi Sunak was chancellor of the Exchequer.

It was extended until July next year by current Chancellor Jeremy Hunt.

Labour leader Sir Keir Starmer said he wanted to “turn the dream of owning a home into a reality”.

The measure sees the government act as guarantor for part of a home loan – to encourage lenders to offer low-deposit deals.

The Labour Party says its plan will help more than 80,000 young people get on to the housing ladder over the next five years.

But according to the Office for National Statistics, external, some 40% of 16.5 million people aged 15 to 34 in the UK were living with their parents in 2022 – about 6.7 million people.

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