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Home loan interest charges may exceed 5% for some first-time buyers, the Sunday Times reports, as lenders push up the cost of borrowing for people with smaller deposits. Aldermore has announced mortgages for borrowers with a 10% deposit at 5.18% over two years, or 5.39% fixed for five years, with a fee of £999. From Tuesday, Lloyds Bank and Halifax will offer a two-year fixed-rate mortgage at 3.54% and a five-year deal at 3.59%, both with a £995 fee. The last time the average cost of 90% mortgages was this high was in January 2013, when fears of a triple-dip recession were widespread. The average five-year deal for people with a 10% deposit is now 3.92%, up from 2.94% in December 2019, according to Moneyfacts.
The Sunday Times (06/12/2020)
Figures from Nationwide show that house prices are 6.5% higher than a year ago, with this the steepest increase since January 2015. Month-on-month, prices climbed 0.9% in November, hitting an average of £229,721. Nationwide research shows properties in national parks carried a 20% premium when sold, with homes on the outskirts of these areas also selling for 6% more than equivalent property elsewhere. Looking to what the future holds, Nationwide chief economist Robert Gardner said that the outlook remained “highly uncertain” and suggested housing market activity is likely to slow in the coming quarters, especially once the stamp duty holiday expires at the end of March 2021. Elsewhere, Halifax’s house price sentiment tracker showed that confidence in the UK housing market cooled in November. Just 14% of people surveyed said that they believed their home had become more valuable this month, compared with 17% in September and October.
Evening Standard (01/12/2020) The Times (01/12/2020) The Daily Telegraph (01/12/2020) The Guardian (01/12/2020)
The summer property boom is fading as pent-up demand eases and the March stamp duty deadline looms. In June, the number of requests for valuations was 70% above the four-year average, according to Property Price Advice, a consumer website. By October, that had dropped by 63 percentage points. Separate analysis by data company Propcast shows that in 12 postcodes, the share of properties marketed for sale that were under offer or sold subject to contract dropped by 15 percentage points or more between September and November. In TA15, a stretch of rural Somerset around the village of Montacute, the share dropped most, by 30 percentage points.
The Daily Telegraph (28/11/2020)
First-time buyers’ hopes of getting on to the property ladder have been boosted as banks have started to relaunch 90% mortgages. Moneyfacts analysis shows that the number of 90% loans available fell from 779 in March to 56 at the start of November but with smaller lenders testing the water in recent weeks, larger lenders including TSB and Yorkshire Building Society have started to expand their offerings, with 80 deals requiring a 10% deposit now available. But Mark Harris of SPF Private Clients said: "However, the lack of availability means borrowers have seen small deposit rates rise. A year ago, 90% two-year fixes were available with rates below 2% but now the equivalent loans cost well over 3%."
The Sunday Telegraph (29/11/2020)
Treasury officials are reportedly advising the Chancellor to extend the stamp duty holiday to avoid the collapse of thousands of housing transactions. Experts warned civil servants earlier this month that there is not enough man power to get transactions through before the 31 March stamp duty deadline passes. It would mean lenders were within their rights to withdraw mortgage offers, causing potentially tens of thousands of transactions to collapse. According to the Mail, Treasury officials are now of the view that extending the property tax reprieve has become “critical”.
Daily Mail (30/11/2020)
The Evening Standard talks to property experts about how a successful COVID-19 vaccine could shape the London market. Mark Harris, chief executive of mortgage broker SPF Private Clients, said he believes a vaccine could convince banks to lower their deposit requirements for first-time buyers, as it will reduce the potential risk. “With a more positive outlook for the economy, we may see lenders' appetite for higher LTV lending increase”. Separately, in the Telegraph, Melissa Lawford says the Paris property market could offer clues as to how house prices might look at the end of the current stamp duty holiday. “The French capital experienced the same post-lockdown property rush, but without a tax break it started to fade in September,” she writes. “That means Paris offers a clearer view of what London's market looks like in the wake of the pandemic without massive, sector-specific stimulus”.
Evening Standard (17/11/2020) The Daily Telegraph (17/11/2020)