Stay updated with the top stories of the week on Mortgage Strategy. Discover insights on topics such as inflation holding steady at 4% and the UK economy dipping into recession. Delve deeper into these stories:
Inflation holds steady at 4%, leaves lenders in limbo
Inflation remained stable at 4% in the year leading up to January, with increased gas and electricity costs balanced out by declines in furniture, household goods, and food prices. This figure was slightly lower than the anticipated 4.2% rise forecasted by many economists.
Official data from the Office for National Statistics indicates that the economy entered a recession in the final quarter of last year. Gross domestic product (GDP) decreased by 0.3% from October to December, marking a second consecutive quarter of decline, meeting the criteria for a recession, which is defined by two successive quarters of falling GDP.
Brett launches consultancy to help businesses grow
BTS Consult and Coach, founded by mortgage industry veteran Paul Brett, has officially launched. This consultancy is dedicated to assisting businesses across the sector in achieving growth and aiding leaders in refining their skills. Leveraging the founder’s extensive background, the company offers strategic consultancy, leadership coaching, and innovative solutions.
Landlord confidence strengthens as capital gain hopes rise
Landlord confidence has seen a year-on-year improvement across all metrics. The latest 2023 BVA BDRC Landlord Panel research report reveals positive sentiments regarding capital gains opportunities, the private rental sector (PRS), and the UK financial market. This marks a shift from the previous year, which had shown negative scores.
Housing market shows early signs of upturn: e-surv
The recent Property Watch report by e.surv reveals the UK housing market’s remarkable resilience in early 2024. Fueled by pent-up demand, favourable mortgage rates, and rising buyer confidence, the market is showing strength. However, this optimism isn’t mirrored in homeowners’ attitudes toward energy efficiency. e.surv’s analysis indicates lukewarm consumer sentiment, with 74% of surveyors noting limited understanding of energy-efficient products and services.
Mortgage repayments to increase £400 a year: Octane
According to the latest research from specialist property lender Octane Capital, first-time buyers may face an annual mortgage cost increase of £398 in 2024, while landlords could see a £367 year-on-year rise. Octane Capital analyzed current mortgage repayment costs for both groups and projected potential increases if mortgage rates remain stable and house prices continue to rise as predicted.
Sellers less likely to drop price now: Hamptons
Estate agent Hamptons reports a significant decrease in the number of price reductions in early 2024. In January, only 48% of homes sold in England & Wales had undergone a price reduction, down from a peak of 55% in October 2023. This marks the first time since June 2023 that less than half of homes were sold following a reduction, indicating that more properties entering the market are competitively priced from the outset.
Paragon launches sub-4% landlord loans
Paragon Bank has introduced its lowest buy-to-let rates in over 18 months with a pair of two-year fixed-rate loans. The specialist lender offers 70% LTV two-year fixes starting at 3.94% for properties rated A to C on energy performance certificates and 3.99% for those rated D to E. For houses in multiple occupations, rates start from 4.19%. These deals come with a 5% fee and are open to portfolio landlords.
Landlord fines more than triple to £20,000 under new Right to Rent rules
Under new government legislation effective today, fines for landlords who rent properties to illegal migrants have surged to £20,000, more than tripling previous penalties. The updated Home Office Right to Rent rules impose penalties of up to £5,000 per lodger and £10,000 per occupier for a first breach, soaring from £80 and £1,000 respectively. Repeat breaches now carry fines of up to £10,000 per lodger and £20,000 per occupier, up from £500 and £3,000.
Two-year fixes fall by greatest rate since 2022: Moneyfacts
Average mortgage rates on two- and five-year fixed-rate deals continued their downward trend for the sixth consecutive month. According to data from Moneyfacts, two-year fixes saw their largest decline in over a year, dropping from 5.93% to 5.56% in February. Similarly, five-year fixes decreased from 5.55% to 5.18% during the same period. This significant drop of 37 basis points in two-year fixes marks the largest decline since December 2022.
