Docklands News

Mortgage deals for first-time buyers are now cheaper than before the pandemic. Younger buyers with small deposits were largely locked out of the market last year as lenders pushed up prices for riskier borrowers. But lenders are now competing for their business to hit their annual targets. Mark Harris, of the mortgage broker SPF Private Clients, said: "Greater competition, in what is still an underserved segment of the market, has forced down pricing on small deposit mortgages." The average two-year fixed-rate mortgage with a 5% deposit is now 3.13%, according to Moneyfacts, down from November last year, when it was 4.74%, and lower than the 3.27% it was in the same month in 2019. It is also the case for longer deals. A five-year fix for first-time buyers with a 5% deposit charges 3.41% on average, lower than the 4.21% in 2019. 

The Daily Telegraph (27/11/2021)  

The Financial Conduct Authority (FCA) has urged banks and building societies to consider changing lending criteria to help an estimated 47,000 borrowers who could benefit from a cheaper mortgage but are currently unable to move. The watchdog’s review of mortgage prisoners found that about 195,000 households have had debts sold on to inactive lenders, with it shown that a quarter of these could save money if they were allowed to switch to a new deal. The review, which looked at the position of borrowers whose loans were sold on to new lenders after the financial crisis, found that about 47% were paying an interest rate between 3% and 5%, compared to 17% of borrowers with active lenders, while 3.3% were locked into paying interest at more than 5%, compared with just 0.8% of other borrowers. 

The Guardian (29/11/2021)  

A study from the property group JLL indicates that increased demand to live to the capital after the height of the pandemic, combined with the return of the overseas buyer, will boost the London housing market over the next five years. JLL predicts prices in London will rise 24.5% by 2026, out-acing national house price growth of 20% over the same period. “There is a bounce back in urban demand in London as people once again reset priorities around where they live and opt to stay and move within the city, rather than leaving,” says Nick Whitten, head of residential research for JLL. “In particular we are seeing people buy in those neighbourhoods which have a village feel as they balance convenience and transport with space and greenery,” he explains.

London Evening Standard  

New Hamptons International research reveals 15 London suburbs where the number of new buyers registering is up year on year, including Barking, with a 110% increase, and Woolwich, up 74%. Twenty years of London price growth have pushed more recent buyers into new neighbourhoods says David Fell, senior analyst at Hamptons. "Buyers looking for a family home from their second or third move are heading to more affordable areas of outer London. This trend has been entrenched by the pandemic, with fewer Londoners heading daily into their Zone 1 office. Buyers are more willing to compromise on a longer commute a couple of times a week in exchange for a forever home further out."

London Evening Standard  

The North-South house price divide “will be smaller" as we move out of the pandemic, according to an expert. Figures released by the Land Registry show over the past three months, prices in the North West have risen by 5.3% to an average of £203,661. Prices in the North East have gained 13.3% over the past year to an average of £152,776. Jonathan Rolande, from the National Association Of Property Buyers, commented: "The pandemic has had a positive effect on the market and there has been a re-balancing of prices between North and South."

Sunday Express  

First-time buyers face paying five-and-a-half times typical annual earnings to get on the property ladder, according to a report. As house prices have surged, the average first-time buyer house price-to-gross earnings ratio in the third quarter of this year was 5.5, surpassing a previous high of 5.4 in 2007. The figures by Nationwide Building Society show a 20% deposit on a home now equates to 110% of the pre-tax income of a typical full-time employee – which is also a record high and up from 102% a year ago. While a significant gap between the least affordable and most affordable regions remains across the UK, this has remained broadly stable over the last year. Scotland continues to have the lowest house price to earnings ratio in the country at 3.4, followed by the North of England at 3.5.

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