Docklands News

A new consumer duty placed on financial services providers could lead to lenders being more cautious and fewer people able to access mortgages, the chief executive of a trade association has said. David Postings told UK Finance's annual mortgage lunch that the measure was a "well-meaning idea". Mr Postings also said there is a need to remain vigilant as the housing stock changes to meet environmental objectives. He said: “I worry that the easy policy option – pushing lenders to go green at a pace that essentially just greens balance sheets and not the housing stock – might prove hard to resist optically. This approach could have the unintended consequence of either creating energy-inefficient properties that are un-mortgageable or penalising those homeowners who cannot make the change easily.”

City AM (13/03/2023)   Daily Mail (13/03/2023)   Evening Standard (13/03/2023)   The Independent (13/03/2023)  

The cost of a mortgage on a first home is typically around £42 per month cheaper than renting, but the difference has reduced and in some parts of the UK renting may be the less expensive option, analysis suggests. First-time buyers could typically pay around £971 per month for a three-bedroom home, while renters would potentially be forking out around £1,013, according to calculations by Halifax. The difference of around £500 per year between buying and renting is down from a peak reached in 2016, when owners were saving £1,567 annually. 

City AM (15/03/2023)   Daily Mail (15/03/2023)   The Daily Telegraph (15/03/2023)   The Guardian (15/03/2023)  

Halifax figures show the average UK house price was £285,476 in February, 1.1% higher compared with January and 2.1% higher than this time last year. It followed a monthly gain in house prices of 0.2% in January and a fall of 1.3% in December. Kim Kinnaird, the director of Halifax Mortgages, said: “Recent reductions in mortgage rates, improving consumer confidence, and a continuing resilience in the labour market are arguably helping to stabilise prices following the falls seen in November and December.” Halifax said house prices are down by about £8,500, or 2.9%, on the August peak but remain almost £9,000 above the average prices seen at the start of 2022 and are still above pre-pandemic levels. Halifax said annual house price growth slowed in all countries and regions in February, with the north-east posting the biggest slowdown, to an annual rate of 1.1% from 3.6%, with homes costing an average £163,953. Average house prices in London are £526,842, down by 0.9% over the last year.  

The Guardian (07/03/2023)   The Independent (07/03/2023)   The Times (07/03/2023)  

In The Telegraph, Melissa Lawford looks at how the post-pandemic return of workers to London is set to result in a property shortfall in the capital. The Greater London Authority forecasts the population to rise by 700,000 by 2031 and JLL predicts the capital needs another 300,000 rental properties in the next eight years. Overall, by 2031, JLL estimates London will have a shortfall of 110,500 rental homes. Emma Rosser, of JLL, warned: "In reality, this could be far higher, given the headwinds to home ownership and the challenges for small landlords limiting supply levels." 

The Daily Telegraph (06/03/2023)  

New figures show that 17% of all new mortgages taken out in December were for terms of 35 years or more, almost double last February's rate, when it was just 9% of home loans. Overall, around 55% of mortgage loans are now taken out for terms of 30 years or more, compared with just 9% in 2005. According to Halifax, the average age of a first-time buyer is now 32 and even older in London, meaning that many borrowers are now on course to still be paying off their home loans in their sixties or even seventies. A spokesman for UK Finance described stretching out mortgage terms as a relatively low-risk option for borrowers to increase their borrowing potential. He added: "It does, however, limit the ability of borrowers to save or invest in other areas - for example their pensions - for a longer period while they are still paying off their mortgage." 

The Sunday Telegraph (05/03/2023)  

A report by the London School of Economics and Political Science says that nearly 200,000 mortgage "prisoners" trapped on interest rates of up to 8.29% should be offered interest-free loans to set them free. The report calculated that the Government made £2.4bn profit from selling the mortgages on to lenders that are not regulated to offer borrowers new deals. Its report now proposes a package of support for struggling borrowers that would cost Whitehall up to £347m over ten years. These proposals include providing equity loans that would be interest-free for five years, to help borrowers reduce the size of their mortgage debt and qualify for a cheaper rate with a new lender. MoneySavingExpert founder Martin Lewis, who funded the research, called on ministers to act "with speed". 

The Sunday Express (05/02/2023)