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Unauthorised mortgage broker among four ordered to pay £4m by High Court

August 5, 2024August 5, 2024 interestratesinfo

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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.

‘All’ UK households on mortgage rate under 4.5 per cent warned

August 5, 2024August 5, 2024 interestratesinfo

Mortgage payers and business owners have been warned that higherrates are here to STAY despite the interest rate cut from the Bank of England last week. Bank documents show policymakers expect that level to be about 3.5% in three years’ time, with mortgages staying around the 4.5 per cent and five per cent level.

Claire, a maternity support worker from Portsmouth, told the Guardian newspaper her family moved into their house in January 2022 on a 1.99% two-year fixed repayment mortgage, paying £1,042 a month. Since then their mortgage payments have risen by more than £500 a month to £1,596.90.

Landlord tax crackdown has created a rental crisis, says Foxtons

August 5, 2024August 5, 2024 interestratesinfo

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.”

Essex landlord banned for three years after HMO court case

August 5, 2024August 5, 2024 interestratesinfo

A rogue landlord who was also a letting agent in Essex has been banned from being a landlord for three years.

Ruhul Mohammed Shamsuddin is now prevented by law from letting houses, engaging in letting agency work or managing properties, and could face both imprisonment and a fine of up to £30,000 if he breaks the banning order, which applies to England only.

He is also prevented from being involved in any company that carries out any of the duties outlined above.

His banning order has been secured via a First Tier Tribunal Property Chamber after Shamsuddin was convicted last year of half a dozen offences in relation to a property at 12, Clifftown Road in Southend-on-Sea (main image) at Colchester Crown Court.

What’s happening to buy-to-let mortgage rates?

August 5, 2024August 5, 2024 interestratesinfo

Average buy-to-let (BTL) mortgage rates have fallen to the lowest levels since September 2022, but remain well above 5%.

While falling rates are good news for landlords, those due to remortgage will face higher repayments, and investors might still think twice before expanding their portfolios.

Here, Which? explains what’s happening to BTL rates and reveals the cheapest deals currently on the market.

First-time buyers spending 40% of pay on mortgages

August 5, 2024August 5, 2024 interestratesinfo

People buying a house for the first time are spending about 37% of their take-home pay on mortgage payments, according to the Nationwide.

The figure is well above the long-term average of 30%, the building society said, making it tougher for new buyers to afford a house.

House price growth picked up in the year to July as wages rose, it added.

Prices increased by 2.1% over the year, the fastest pace since December 2022.

Some people were feeling more confident about getting a mortgage as their pay packets went up, Nationwide chief economist Robert Gardner said.

But relatively high mortgage rates and affordability issues also acted as a brake for prospective buyers.

What can I do about my mortgage now the base rate has been cut?

August 5, 2024August 5, 2024 interestratesinfo

Last week’s Bank of England interest rate cut, the first since 2020, spelled good news for millions of homeowners and would-be buyers – but it has also given them lots to think about.

If you are looking to buy a home, what sort of mortgage do you go for, and is this going to push house prices even higher? And if your existing mortgage deal is about to end, should you grab another one right now, or hold fire in case lenders launch cheaper products?

The cut, from 5.25% to 5%, should translate into lower borrowing costs for homeowners with a base rate tracker mortgage, or whose monthly payments are linked to their lender’s standard variable rate (SVR).

However, almost 7m of the UK’s 8.4m existing residential mortgages are on a fixed rate, so most people won’t see any change. A chunk will, however, need to consider their options over the next few months because their current deal is coming to an end.

Here we round up some of the advice from mortgage brokers.

Interest rates cut hopes rise as Bank of England says mortgage approvals steady

July 29, 2024July 29, 2024 interestratesinfo

The Bank of England has reported that the number of mortgage approvals for home buyers remained “broadly stable” in June, with 59,976 mortgages for house purchase approved, compared to 60,134 in May.

The Bank’s Money and Credit report stated: “Net mortgage approvals (that is, approvals net of cancellations) for house purchases, which is an indicator of future borrowing, remained broadly stable at 60,000 in June.”

Since August last year, the base rate has stayed at 5.25 percent.

However, with inflation hitting the two percent target level for the past two months, there are hopes that interest rates can start to be reduced, possibly as early as Thursday, easing the pressure on borrowers.

Rightmove backs Labour efforts to turn renters into first time buyers

July 29, 2024July 29, 2024 interestratesinfo

Rightmove has thrown its weight behind the new Labour government’s bid to help first time buyers – and it wants it to go further.

In a statement over the weekend the portal said it welcomes proposals to help first-time buyers, including Labour’s initiative to give local first-time buyers the first chance to buy homes on developments. Its housebuilding targets and planning reforms should also positively impact those buying for the first time.

Rightmove cautions that its analysis suggests some limitations with a mortgage guarantee scheme, and it is only likely to be able to support a small number of first-time buyers. However, it says making it permanent would also at least give first-time buyers the confidence that it is an option for them.

A new first-time buyer study by the portal reveals that only 37% of homes for sale will be eligible for first-time buyer stamp duty relief in England when the existing thresholds revert from April 2025.

Landlord property purchases slump to record low

July 29, 2024July 29, 2024 interestratesinfo

Landlords purchased just 10% of homes sold across Britain during the first half of this year – the lowest share for at least 15 years.

The figure comes from Hamptons which says the new low is a sharp contrast with the 16% recorded in 2015 – before tax and regulatory changes reduced the appeal of investment in buy to let.

More recently, high mortgage rates combined with political uncertainty and the threat of new rental regulations have weighed on the appetite for new investors to enter the market. The share of investor purchases has been gradually falling further over the course of 2024 so far, reaching a low of 9.7% in June.

Assuming current trends continue into the second half of the year, in number terms, there are likely to be 113,630 new buy to let purchases across Britain in 2024, 75,900 or 40% fewer than in 2015.