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Activists demand immediate rent controls from Starmer government

July 8, 2024July 8, 2024 interestratesinfo

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In a blog released within minutes of Sir Keir Starmer becoming Prime Minister, activist group Generation Rent calls for rent controls.

It says: “In order to be effective, we believe the new government must limit the rent increases landlords can impose to tenants stay put, rather than continue to allow landlords to push rents up faster than tenants’ wages.”

The activists also want to stiffen Labour’s policies on so-called bidding wars.

Starmer spoke in broad terms during the election campaign about giving tenants the right to challenge ‘high’ rent rises, and stopping agents and landlords from effectively auctioning tenancies to the highest bidder.

But Generation Rent’s blog states: “While plans to challenge increases are welcome and bidding wars must be outlawed, any system that would allow tenants to offer so-called ‘voluntary’ offers over asking prices would undoubtedly be exploited by some landlords and letting agents to allow back-door bidding wars.”

UK needs 120,000 new rental homes to cut record-high rents, Rightmove warns

July 8, 2024July 8, 2024 interestratesinfo

An additional 120,000 homes are needed to fix Britain’s broken private rental market, Rightmove has warned, after revealing that advertised rents have hit new record highs.

The average rental price on the market has hit £1,316 a month outside London, rising 7% in the last year. In London renters can expect to see average rents of £2,652 a month advertised.

Although the pace of rental growth has slowed, a mismatch between supply and demand is preventing it from returning to what Rightmove called “normal growth” of around 2% per year – in line with the Bank of England’s inflation target.

The next government must accelerate housebuilding and incentivise landlords to invest in more homes to bring 120,000 rental homes on to the market and address the supply issue, according to Tim Bannister, Rightmove’s property expert.

Mortgage misery led voters to turn against Tories

July 8, 2024July 8, 2024 interestratesinfo

Tory voters lost faith in the ability of Rishi Sunak’s party to manage the housing market ahead of the election, figures reveal.

A results breakdown shows the Conservatives haemorrhaging support to Labour and the Liberal Democrats in seats with the most mortgage holders.

It came despite inflation falling to the 2 per cent target and rate cuts expected this summer.

Sarah Coles, head of personal finance at Hargreaves Lansdown, said mortgage holders were ‘unconvinced’ that Sunak’s plan to fix the economy was working.

The Bank of England began to hike rates in late 2021 to bring rising prices under control.

But the mini-budget unveiled by Liz Truss – who has now lost her seat – sent borrowing costs up in September 2022.

Rates are still at a 16-year peak of 5.25 per cent, which has piled on financial pressure.

Low-deposit deals hit two-year high: Moneyfacts

July 8, 2024July 8, 2024 interestratesinfo

The report says: “This marks the fifth consecutive month of rises. These rates remain slightly lower compared to December 2023. The average two-year fixed rate is slightly higher compared to January 2024.”

What Labour’s huge win means for pensions, mortgages and your finances

July 8, 2024July 8, 2024 interestratesinfo

Labour has made several pledges which will have an impact on households’ finances – but as it takes power it will also face significant challenges with the cost-of-living squeeze continuing to exert its grip.

Sir Keir Starmer will be the UK’s new Labour prime minister after a Conservative rout saw former premier Liz Truss and a dozen serving Cabinet members lose their seats.

Outgoing Prime Minister Rishi Sunak said he took responsibility for the electoral mauling inflicted on his party as it suffered its worst ever result.

At a victory rally in London, Sir Keir said the country can now “get its future back”.

He told jubilant activists “We did it”, adding: “Change begins now.”

Here is a look at what is on the horizon in the months ahead:

HSBC, Barclays and Yorkshire BS latest to cut mortgage interest rates

July 8, 2024July 8, 2024 interestratesinfo

Three more mortgage lenders have announced they are cutting mortgage rates, in another shift downwards for home loan costs.

Barclays, HSBC and Yorkshire Building Society have all reduced their rates, following Santander and Halifax earlier this week.

Yorkshire BS has cut its mortgage rates by up to 0.2 percentage points.

Both HSBC and Barclays’ rate changes mean they offer some of the lowest interest rates on the market.

HSBC is offering a 4.39 per cent five-year fix to those remortgaging with at least 40 per cent equity in their home. The deal comes with a £998 fee.

For those buying with a 25 per cent deposit, HSBC is now offering the lowest rate on the market.

Mortgage rates between 3.5% and 4.5% will be ‘new normal’: Lloyds CEO

July 1, 2024July 1, 2024 interestratesinfo

Mortgage rates between 3.5% and 4.5% will be the “new normal” even after base rates begin to fall, says the head of the UK’s biggest home loan lender.

“We have just come off a decade where mortgages have been in the 1.5% and 2.5% range,” Lloyds Banking Group chief executive Charlie Nunn told Sky News.

“The expectation that markets have is that interest rates won’t get below 3.5% — and that means that the new normal for mortgages will be in that 3.5% and 4.5% range.”

Nunn warned that these rates will not come to market until the Bank of England begins a series of base rate cuts.

The base rate has remained at a 16-year high of 5.25% since last August. The last time the central bank cut rates was in March 2020.

Mortgage Rates 1 July 2024

July 1, 2024July 1, 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 predicting that the Bank Rate will fall to 5% at that point.

Natwest lowers new business and existing customer deals

July 1, 2024July 1, 2024 interestratesinfo

High street lender Natwest will cut new business and existing customer rates by up to 0.23%, including purchase and remortgage deals.

On the purchase side, Natwest’s two- and five-year deals will fall by around 0.12% and 0.23%. This includes its fee-free two-year fixed rate at 95% loan to value (LTV), which has fallen from 6.27% to 6.04%.

In its remortgage range, two- and five-year deals will fall by around 0.08% and 0.13%. Its two-year fixed rate at 80% LTV with a £995 fee will go down from 5.66% to 5.53%.

Purchase and remortgage high-value deals will contract by around 0.1% and 0.13% respectively.

Within Natwest’s first-time buyer range, cuts of around 0.05% and 0.06% will apply. An example includes its five-year fixed rate purchase with no fee and £250 cashback at 90% LTV falling to 5.02%.

Rents rise 7% in June as market summer season: Goodlord

July 1, 2024July 1, 2024 interestratesinfo

The average cost of an English rental property in June lifted 6.7% to £1,225 compared to a year ago, as the lettings market enters its high season.

The South West posted the highest year-on-year rise, where prices jumped 13.1% to £1,347 over the same period, data from the Goodlord Rental Index shows.

In London, rents broke the £2,000 mark for the first time this year, rising 2.2% to £2,010. This was also the lowest annual uplift among English regions.

The report points out: “June traditionally marks the beginning of the high season for rental prices. Buoyed by demand from students, rents typically peak between June and September.

“Last year, rents peaked in July at £1,367 per property, on average.”

Between May and June, average rents rose by 4% month-on-month to £1,225 — with all but one region recording an increase in rents.