Docklands News

House price falls are imminent amid soaring mortgage rates and increased pressure on household budgets, according to the Centre for Economics and Business Research (CEBR). The analysis suggests there will be a downturn in 2023, with prices set to fall by 4% next year. Meanwhile, Capital Economics has forecast a two-year property market downturn, with price falls of between 5% and 10% by the end of 2024. Andrew Wishart of Capital Economics comments: “The historical record shows that increases in interest rates of the scale that we are seeing now are always a precursor of house price falls". Martin Beck, of the EY Item Club, notes that more expensive properties, whose buyers are less dependent on the mortgage market and who have more savings, are more likely to hold their value but “properties for first-time buyers might see outright falls".

The Daily Telegraph (13/08/2022)  

The number of available buy-to-let deals has plunged by a third since June as lenders withdrew 1,100 deals in two months, according to data from Moneyfacts. In July alone, the number of available mortgages fell by 14%. Experts warned that banks are ditching their best buy-to-let deals as rising interest rates squeeze their margins. Rates on buy-to-let deals have also rocketed. On August 1st, the average rate on a five-year fixed-rate buy-to-let mortgage was 4.49%, a jump of 1.33 percentage points from the start of February. Rates on two-year fixes jumped from 2.9% to 4.04%. As of August 1st, there were 2,375 buy-to-let mortgage deals available, compared to 3,484 at the start of February.

The Daily Telegraph (15/08/2022)  

Financial regulators have granted specialist lender Perenna a licence to offer mortgages with fixed rates of up to 50 years. Perenna could give buyers rates of 4 to 4.5%. It will initially provide loans locking in rates for 30 years. 

Financial Times (15/08/2022)   The Sun (15/08/2022)  

House prices marked their first decrease since June last year, dropping slightly last month to stand at an average price of £293,221. Prices fell by a marginal 0.1% in July, according to Friday’s Halifax House Price Index. The annual rate of growth eased to +11.8% (from +12.5%), with Wales showing the strongest annual growth in the country. In Scotland, the average house price was at a record high of £203,677, although it did see a slight slowdown in annual house price growth in July, to 9.6% from 9.9% the previous month.  “While we shouldn’t read too much into any single month, especially as the fall is only fractional, a slowdown in annual house price growth has been expected for some time,” Russell Galley, Halifax managing director, said. “Leading indicators of the housing market have recently shown a softening of activity, while rising borrowing costs are adding to the squeeze on household budgets against a backdrop of exceptionally high house price-to-income ratios.” 

City A.M. (05/08/2022)  

UK housebuilding activity has returned to pre-pandemic levels, according to an industry body. Some 40,289 new homes were completed in the second quarter, 16% higher than the same period in 2021, the National House Building Council (NHBC) said. It was the highest quarterly figure since 42,354 completions were recorded in the fourth quarter of 2019. Wales was the only part of the UK to see a decrease in new home completions in the second quarter of this year compared with the second quarter of 2021, with 1,183 completions recorded, falling slightly from 1,189. In the second quarter of 2020, when strict lockdown restrictions were in place, just 11,059 new home completions were recorded. Growth in new home completions in the second quarter was driven by the private sector, where completions were up by 23%, while completions in the affordable and build-to-rent sectors were level, the NHBC said. 

Daily Mail (09/08/2022)  

Mortgage rates are now at their highest level in eight years, as the top deals being offered disappear within days of the Bank of England’s latest rate increase. The average five-year deal is now higher than 4% for the first time since October 2014, data shows. A typical two-year fixed mortgage also rose for the tenth month in a row to 3.95%. Meanwhile, the shelf-life of home loan products fell, with offers now typically pulled from the market after just 17 days. There are also fewer deals to choose from, with 4,407 mortgage products available at the start of this month, down 149 since the beginning of July. Eleanor Williams, of data analysts Moneyfacts, warned: “Those looking for a new mortgage have the shortest length of time we have ever recorded to try to secure their deal of choice.” It comes just days after the Bank of England raised its base rate by 0.5 percentage points - the biggest increase in 27 years - in a bid to control spiralling inflation. 

Daily Mirror (08/08/2022)