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Landlord property purchases slump to record low

July 29, 2024July 29, 2024 interestratesinfo

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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.

Soaring UK mortgage rates have pushed 320,000 adults into poverty, thinktank says

July 29, 2024July 29, 2024 interestratesinfo

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.

Tribunal slams ‘reprehensible’ landlord who illegally evicted nurse

July 29, 2024July 29, 2024 interestratesinfo

A landlord who sub-let an unlicensed HMO, failed to pay thousands of pounds in rent to the owner and illegally evicted a tenant has been handed a £4,872 rent repayment order.

The tenant – a nurse at a nearby hospital – moved in during December 2020, paying £550 per month and a deposit of £580, a First Tier Property Tribunal heard.

He shared the four-bedroom house in Croydon Road, Wallington (main image), with five other men, and said landlord Samuel Babajide Saibu did not live there.

The tenant was given two weeks’ notice in December 2022 but refused to leave as he needed more time to find somewhere else and paid the rent in January 2023. Saibu changed the locks, meaning that the tenant had difficulty recovering his possessions, and didn’t repay the deposit or the last month’s rent.

My mortgage fix ends in January – how low could rates get by then?

July 29, 2024July 29, 2024 interestratesinfo

Is the mortgage market turbulence getting you down? Have you got a mortgage-related question you need answering? Email in and we’ll get one of our experts to reply. Nick Mendes, mortgage technical manager at John Charcol, has given his advice to a reader below. If you have a question for our experts, email us at money@inews.co.uk.

Question: My five-year mortgage fix ends in January next year. We have a 80 per cent loan-to-value mortgage and were paying under 2 per cent. I know we’ll pay much more from next year, but I just wondered if you could share any insight on what sort of rate we might be looking at?

Answer: There has been considerable mortgage rate repricing among lenders in recent weeks. With a bank rate reduction imminent – whether on 1 August or 19 September – we finally appear to be heading towards an easing of rates.

Mortgage rate hopes as one lender offers below 4%

July 29, 2024July 29, 2024 interestratesinfo

Mortgage rates have fallen as competition between lenders intensifies ahead of the Bank of England’s next rate decision.

The average rate for a two-year fixed deal, which had been very close to 6% at the start of the month, is now at 5.79%, according to the financial information service Moneyfacts. The average five-year rate is 5.39%.

The Nationwide has become the latest lender to move, by reducing its five-year fixed mortgages, for new customers moving home with a 40% deposit, to a rate of 3.99% plus a fee.

Mortgage analyst Kylie-Ann Gatecliffe said this could be the start of a “rate war” between the big banks.

The last time Nationwide – the UK’s biggest building society – offered rates below 4% was in February.

“Although this is only available for purchases right now, we hope that the re-mortgage market will follow,” said Sarah Tucker, founder of The Mortgage Mum.

Matt Smith, from property portal Rightmove, said: “We’ve seen average mortgage rates drop at a pace not seen for a while this week.

“The first sub 4% rate for those with larger deposits and prepared to pay a higher fee is the headline-grabber, but we’ve also seen some notable drops in rates in other loan-to-value brackets which should benefit more mass-market movers.”

Meet Generation Rent: Three in 10 younger Brits prefer to rent than buy a home

July 29, 2024July 29, 2024 interestratesinfo

New research reveals three in 10 Brits aged 18-34 can afford to buy a home but choose to rent, with renting a big topic of focus for the Labour party following their landslide victory, which includes plans to protect tenants more and new energy efficient targets.The research, conducted by popular rental brand UNCLE, has delved into British renters’ stance on renting vs homeownership. Being financially stable enough to get a foot on the property ladder is a huge factor when it comes to buying a home. However, UNCLE’s research found…

RENTERS (REFORM) BILL: YOUR COMPLETE GUIDE

July 22, 2024July 22, 2024 interestratesinfo

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).

Labour’s Renters Rights Bill – the government explains

July 22, 2024July 22, 2024 interestratesinfo

The government has released more information on its new Renters Rights Bill, which is expected to be launched into Parliament in the autumn.

Only brief reference to the Bill was made in this week’s King’s Speech, when the Sovereign said: “Legislation will be introduced to give greater rights and protections to people renting their homes, including ending no fault evictions and reforming grounds for possession.”

But the government has now released background notes on this measure, and all others announced in the speech.

Mortgage bombshell leads to surge in the number of Brits ‘going bust’

July 22, 2024July 22, 2024 interestratesinfo

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.

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

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.