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Four more mortgage lenders slash rates as new home loan price war heats up amid interest rate cut hopes

July 22, 2024July 22, 2024 interestratesinfo

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THE mortgage price war continues to heat up, with four more lenders slashing rates amid hopes of an interest rate cut.

TSB and Santander are the latest big names to reveal a drop in the cost of borrowing, easing the pain for homeowners and first-time buyers.

Mortgage rates remain high as the Bank of England hiked the base rate several times in a bid to tackle inflation

The base rate is used by banks to set interest rates for borrowing, including mortgages.

It has remained at 5.25% since August last year.

Mortgage Rates 22 July 2024

July 22, 2024July 22, 2024 interestratesinfo

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 August 2023).

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

How first-time buyers could save hundreds a year under Freedom to Buy plans

July 22, 2024July 22, 2024 interestratesinfo

First-time buyers could save hundreds of pounds on their mortgage bills under potential changes to the Government’s mortgage guarantee scheme, experts have told i.

The party’s election manifesto hinted at further changes to the initiative, which sees the Government act as a guarantor for people unable to save big deposits.

It promised to make the scheme “comprehensive” with “lower mortgage costs” and during the election campaign Labour said it will “will work with lenders” to increase uptake of the scheme – but it did not outline further details.

The party has already committed to making the existing mortgage guarantee scheme into a permanent fixture named Freedom to Buy.

The Tony Blair Institute for Global Change (TBI) told i there was potential to expand the scheme so it is compulsory for mortgage lenders, which would lower mortgage rates for first-time buyers with small deposits.

Buy-to-let mortgage market has shrunk ‘amid challenges for landlords’

July 22, 2024July 22, 2024 interestratesinfo

Strong rental demand and lending standards could mean the buy-to-let sector emerges from the downturn sooner than expected, UK Finance said.

The volume of lending for buy-to-let (BTL) house purchases more than halved over the course of 2023, according to a banking and finance industry body.

The number of new mortgage deals being granted for this purpose fell from 25,280 in the fourth quarter of 2022 to 12,422 in the first quarter of this year.

Rapidly rising interest rates played a major role in this trend, making it harder for those looking to buy a BTL property to pass lenders’ affordability tests, UK Finance said.

Watch out for sneaky mortgage tactic estate agents are using to ‘rip you off’

July 22, 2024July 22, 2024 interestratesinfo

HOMEBUYERS pressurised into using estate agents’ mortgage services face being “ripped off”, warn experts as cases of conditional selling rise.

Conditional selling, banned under industry regulations, happens when estate agents try to strong-arm or incentivise buyers to use their mortgage broker.

Buyers who refuse are told it could affect their chances of securing the property.

It’s an underhanded practice that has been around for a long time say brokers. But recently it has become more widespread.

If persuaded, buyers could wind up paying too much for their mortgage, for the property and for extra services such as insurance and legal work.

Sun Money explains how to spot signs of pressure selling and what you can do to avoid it.

How half a million homeowners will dodge a mortgage rate hike

July 22, 2024July 22, 2024 interestratesinfo

Such was the effect on households of the rise in the cost of mortgage deals that followed the Liz Truss mini-Budget in September 2022 that Chancellor Rachel Reeves is planning legislation intended to prevent a repeat of similar shock announcements on spending and tax.

Labour to bring back housebuilding targets

July 15, 2024July 15, 2024 interestratesinfo

She promised her government would build 1.5 million homes over the next five years, as pledged in Labour’s election manifesto.

The party is set to reintroduce compulsory housebuilding targets, encourage development of poor-quality areas in the green belt known as ‘grey belt’ land, and make extra funds available for hundreds of new planning officers.

Speaking to business leaders at the Treasury on Monday, Reeves promised to focus on kickstarting economic growth in part by overhauling the planning system to speed up the delivery of more housing.

However, Reeves warned that this was not a “green light” to any kind of housing development, and that the right “mix” of affordable housing and homes for social rent would be built.

Birmingham City Council licensing scheme cracks down on rogue landlords

July 15, 2024July 15, 2024 interestratesinfo

Birmingham City Council is urging landlords to register their properties under new licensing schemes, or risk facing fines of up to £30,000.

The move comes as part of a broader initiative to enhance the quality and safety of rental housing within the city.

The legislation, which has been active for over a year, requires that all rental properties meet specific licensing requirements.

Landlords who fail to comply with these regulations not only face hefty fines but also expose themselves to Rent Repayment Orders (RROs) from tenants. These orders can allow tenants in unlicensed properties to reclaim up to 12 months of rent from their landlords.

Councillor Jayne Francis, cabinet member for housing and homelessness, said that the rules have been made clear and it is the responsibility of landlords to ensure that their properties have the correct licensing.

Should we pay off our mortgage or save into a pension? DAVID HOLLINGWORTH replies

July 15, 2024July 15, 2024 interestratesinfo

My husband and I jointly own our home, which has a £86,000 mortgage left to pay. It has 18 years left and we have one year remaining on our current 1.69 per cent fixed rate.

Our property has about £260,000 equity in it due to house prices rising in the past and extensive renovations.

We are both 49 and work full time on average salaries. We have no pension apart from state pension; our only asset is the property. We have a plan to downsize once our daughter, who is 10, leaves home to help pay for retirement.

My question is, is it worth trying to pay the mortgage off faster?

We could probably put a £20,000 lump sum towards it, and make an overpayment of £500 each month. This would mean we could pay it off in six years rather than 18.

But would we be better off just putting the money into pensions instead?

Lenders take too long on mortgage offers claims agent

July 15, 2024July 15, 2024 interestratesinfo

Estate agents’ body Propertymark has issued a report called ‘A Dickensian Legal Process’ exploring why it takes long and longer to exchange contracts on a property for sale.

In March 2016 78% of transactions progressed from offer acceptance to exchange of contracts within 12 weeks, whereas in March 2024 the figure was just 29%.

While most agents in the report blame solicitors’ ways of working for delays, at least one has it in for lenders, saying: “I think lenders are taking too long to send out mortgage offers. Generally, the whole system is much slower to the previous 30 years.”

Timothy Douglas, head of policy and campaigns at Propertymark, comments: “It is not new news that the amount of time taken to complete a purchase on a home is becoming increasingly tedious and lengthy. However, it’s important more than ever considering that the time taken to complete is up to six months and longer in some cases, to understand the fundamental issues causing this.