Docklands News

Nearly half a million mortgage borrowers in the UK are set to face sharp increases in their repayments as a wave of fixed-rate deals come to an end. According to the Financial Conduct Authority (FCA), 485,000 mortgage borrowers are on fixed deals due to expire in the final three months of 2023. By the end of this year, a record 1.5m people will have remortgaged. The FCA predicts a further spike in remortgages next spring, with over 180,000 homeowners coming off fixed-term rates in April. The value of outstanding mortgage balances in arrears has risen by 28% to £16.9bn, the highest total recorded since 2016. Eric Leenders, a managing director at UK Finance, said that lenders are concerned about forbearance to prevent an increase in repossessions. Ele Clark, at Which?, said: "With more than half a million fixed-rate deals ending in the next few months, it's vital that lenders are offering adequate and fully resourced customer support to help borrowers assess their options." 

Daily Mail (19/09/2023)   Daily Mirror (19/09/2023)   The Daily Telegraph (19/09/2023)   The Independent (19/09/2023)  

The cheapest mortgage rates in the UK have fallen below 5% for the first time since July, signalling a positive outlook for the economy. Yorkshire Building Society introduced a 4.99% five-year fix, while Coventry Building Society cut its cheapest five-year deal to 5%. Other major lenders, including Barclays, Halifax, and Nationwide Building Society, have also reduced their mortgage rates, bringing hope to the 1.6m homeowners whose existing deals are ending next year, as well as for the property market. The average of the cheapest two-year fixes has dropped from 6.25% to 5.9%, while the average of the cheapest five-year deals has fallen from 5.73% to 5.36%. 

The Times (16/09/2023)  

Approximately 50% of mortgage borrowers are choosing to stick with their current lender rather than remortgage to a new one when their deal ends, according to data by broker L&C Mortgages. This is a significant increase compared to the previous year, when only a quarter of borrowers were staying with their current lender. The rising mortgage rates and affordability concerns may be preventing some borrowers from switching to a different lender. However, eligible customers are offered a "product transfer" by their current lender, which allows them to switch to a new deal without going through additional checks and paperwork.

According to research by CBRE UK, new London home applications and construction starts in the first half of 2023 totalled just 21,918, the lowest figure in 13 years. It also found applications for new build homes lodged in the second quarter were just 2061 - the lowest quarterly figure recorded since 2010 when the data was first available. If the trend continues, the market could end the year with applications for approximately 11,800 homes, 47% below the previous trough in 2010. Julien Mills, the firm's head of new homes, said: “Planning regulations, inflated construction costs, the cost of debt, and buyer affordability on borrowing and purchase taxation have all influenced the new homes development and second-hand market places recently. However, we need to continue to build more homes to address the supply-demand imbalance that exists in London".

Evening Standard (11/09/2023)  

Experts say house price drops will continue this year and into 2024. Nick Mendes, of brokers John Charcol, said: "The market topped out in August last year, but I expect prices will now fall within the region of 10 to 15% from that point - and keep drifting lower for at least a year." David Hollingworth, of L&C Mortgages, agreed. "I think there could be falls of around 10%," he said. "Activity levels will remain subdued - I'd anticipate that those who were thinking of a move this year will be putting that on ice for now." Tom Bill, of Knight Frank, added: "We think house prices will be down 5% this year and 5% next year - roughly 10% over the two years." 

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Research by the National Housing Federation (NHF) shows that one in five households in England will have homes costing more than a third of their income, defined as unaffordable, by 2030. The NHF said that without a Government plan to solve the housing crisis an additional 55% of households (1.7m) will have unaffordable homes by the end of this decade. Analysis found the increase, to 4.8m households, includes 1.1m additional homeowners spending more than a third of their net income on mortgages, more than doubling from 800,000, and 600,000 additional households in unaffordable private rented homes. By 2030, 2.2m households will pay a third of their income to rent privately and 700,000 in social housing. Kate Henderson, chief executive of the federation, said: "Today's report shows that short-term, piecemeal decisions on housing have created an emergency that will continue escalating at a rapid rate but this is a crisis that can be solved. By committing to a long-term plan for housing that is properly funded and based on ambitious, measurable outcomes, politicians of all parties could begin to turn the tide." 

The Times (11/09/2023)