Docklands News

Kwasi Kwarteng is understood to be considering an extension to the Government’s mortgage guarantee scheme following a meeting with bank bosses on Thursday. Chief executives from NatWest, Lloyds Banking Group, HSBC, Santander and TSB along with executives from Barclays, Nationwide, Virgin Money and Starling Bank were asked to comment on a number of options to support consumers struggling to secure mortgages. The Chancellor is now mulling an extension to the mortgage guarantee scheme beyond its December deadline. The guarantee compensates a lender for losses suffered in the event of the property having to be repossessed and it is hoped that by extending it lenders will feel more confident offering reasonably priced low-deposit mortgages. Ray Boulger, broker at John Charcol, said an extension of the mortgage guarantee scheme would be “good news for anyone in need of a mortgage with only a 5% deposit.” 

Financial Times (06/10/2022)   The Guardian (06/10/2022)  

Mortgage approvals increased by 16% in August, with Bank of England figures showing that lenders approved 74,300 homebuyer loans. This compares to 63,700 in July and represents the highest number since the start of the year. It also reverses a series of declines recorded in the past few months. Approvals for re-mortgaging also increased to 49,400 in August, up from 48,400 in July. Net mortgage borrowing rose by £1bn to £6.1bn, compared with a pre-pandemic average of £4.3bn. Samuel Tombs, chief UK economist at Pantheon Macroeconomics said the “sudden leap” in house purchase mortgage approvals in August “likely reflects people attempting to secure loans ahead of expected increases in mortgage rates, rather than a fundamental strengthening of demand.” 

Daily Mail (30/09/2022)   Evening Standard (30/09/2022)   The I (30/09/2022)   The Times (30/09/2022)  

City economists have warned that house prices could fall by more than 20% if the Bank of England is forced to hike interest rates steeply. Mortgage affordability – the ratio of a home purchase loan to the size of the borrower’s income – may have to drop from 3.5 to 2.5 if lenders start charging 6% on mortgages. Andrew Wishart, senior property economist at consultancy Capital Economics, said: “If that happened overnight, it would imply a 21% fall in house prices.” Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said that if the Bank did hike rates to the market’s expectations of 6%, it “would lead to a sharp rise in mortgage defaults,” adding that a sudden wave of borrowers being unable to service their mortgage debts could “set in motion a banking crisis.” 

City AM (27/09/2022)  

Mortgage repayments could surge by as much as £800 per month for the typical homeowner as financial markets bet on 6% interest rates next year. Markets expect a series of sharp increases to take the headline rate to 6% or above next year, the highest rate since 2000, in the wake of market chaos following the mini-Budget. Someone who bought in the first half of 2021 - and so whose two-year fix expires next year, when the base rate could be 6% - will see their monthly repayments jump from below £900 to £1,696, or £800. This amounts to £9,600 a year more. If the base rate increases from 2.25% to 3% before November, that would take the average rate on a two-year fix for someone with a 25% deposit from 4.14% to 4.89%. 

The Daily Telegraph (26/09/2022)   The Independent (26/09/2022)   The Times (26/09/2022)  

A slew of banks and building societies have stopped offering new home loans as lenders rush to reprice mortgages following a steep rise in UK gilt yields. The Chancellor’s mini-Budget sent the pound down sharply and it hit a new record low of $1.035 against the dollar after Kwasi Kwarteng pledged further tax cuts at the weekend. The Bank of England has pledged to step in but has so far ruled out an emergency rate rise, sticking instead with its scheduled November 3rd review. 

Financial Times (26/09/2022)   The Daily Telegraph (26/09/2022)   The Guardian (26/09/2022)   The Times (26/09/2022)  

A new study from Tapi, a carpet and flooring company, has shared the home assets that add the most value to a property. A good garden took the top spot with more than half claiming they would increase their offer on a home for this feature. The study revealed 54% respondents said a nice garden was their top asset, 50% said a nice kitchen, 44% said good parking or garage space, 36% said a nice bathroom and 29% said natural light. A further 26% of Britons also said they would increase their offer on a home with double or triple glazed windows. Flooring is also important to buyers with 20% of respondents claiming they would increase their offer on a home with carpets or flooring that didn't need replacing.

Daily Express (29/09/2022)