Stay updated with Mortgage Strategy’s top stories this week: NatWest unveils sub-4% deals and reduces rates by up to 79 basis points, and UK house prices experience the most significant drop since 2011. Read more below:
NatWest launches sub-4% deals, cuts rates by up to 79bps
NatWest is set to reduce rates for new and existing customers by up to 79 basis points, unveiling sub-4% home loans. The offerings include a five-year fixed-rate switcher deal at 3.94% for a 60% loan-to-value ratio with a £995 fee and a five-year purchase fix for new customers at the same rate and 60% LTV, featuring a £1,495 fee. Other banks like HSBC, Virgin, and Santander have also introduced sub-4% deals in 2024.
UK house prices see biggest fall since 2011
The average UK house price experienced a notable annual decline of 2.1% in the 12 months leading up to November 2023, marking the most substantial fall since 2011. The current average house price stands at £285,000, reflecting a £6,000 decrease compared to the previous year. The Office for National Statistics breaks down these figures by country, revealing a 2.9% decrease in average house prices in England to £302,000, a 2.4% decrease in Wales to £213,000, and a 2.2% increase in Scotland to £194,000 over the same 12-month period.
First time buyers shun new build properties
Recent data from UK conveyancing solicitors reveals a consistent decrease in the proportion of first-time homebuyers choosing new builds over the past three years (2021 to 2023). Despite government efforts to encourage the construction of new properties, the interest in new builds appears to be declining, according to researchers at conveyancing solicitors firm Bird & Co.
TMW cuts landlord rates by up to 120bps, fixes start at 3.69%
The Mortgage Works slashed landlord loans for new and existing customers by up to 120 basis points from January 17. Highlights of the Nationwide’s buy-to-let arm’s reductions for new customers included two-year fixes at 3.69% with a 3% fee, available up to 65% loan to value, down by 50 basis points. New two-year fixes at 3.99%, with a £3,995 fee, available up to 75% LTV, and five-year fixes at 3.94%, with a 3% fee, available up to 55% LTV, also witnessed rate reductions.
Surprise inflation rise to 4% dampens hopes of spring base rate cut
Unexpectedly, inflation rose to 4% last month, marking its first increase in nearly a year. The uptick in consumer prices, from 3.9% the previous month, was driven by higher costs in alcohol and tobacco, according to data from the Office for National Statistics. This rise contradicted expectations of an early interest rate cut by the Bank of England. It’s the first inflation increase since February of the previous year when it reached 10.4%.
Santander cuts resi, new build rates by up to 45bps
Santander for intermediaries is reducing selected standard residential and all new build exclusive fixed-rate purchase deals by up to 45 basis points starting 18 January. Reductions cover selected standard residential purchase fixes by 5bps to 45bps and all new build exclusive fixes by 17bps to 35bps. However, the bank is withdrawing selected 60% loan-to-value and 75% LTV first-time buyer exclusive fixes with £500 cashback.
Landlords set up record 50,000 limited companies in 2023: Hamptons
Last year, landlords established a record-breaking 50,004 buy-to-let companies to shield themselves from rising mortgage rates, surpassing the previous record of 48,520 set the previous year, according to data from Hamptons. Meanwhile, the average rent for newly let UK properties increased by 10.2% YoY in December, marking the strongest end-of-year growth since Hamptons started tracking this measure in 2014 and surpassing the previous annual rental growth high of 7.7% in December 2022.
Asking prices hit four-year January high: Rightmove
In January, average new seller asking prices experienced the largest monthly increase since 2020, rising by 1.3% to £359,748, according to Rightmove. The number of new properties coming to the market for sale is 15% higher than the same period a year ago. Additionally, buyer demand in the first week of 2024 increased by 5% compared to the same period last year, driven by easing mortgage rates.
OSB Group hires Iles as Consumer Duty director
OSB Group has appointed Kelly Iles to the newly established position of Group Customer & Consumer Duty Director. In this role, Iles will oversee the central focus on customers across the group and support the business’s ambitions. She will report to Jon Hall, the group’s Managing Director. OSB Group encompasses entities such as Precise Mortgages, InterBay, and Kent Reliance.
Metro Bank brings back 95% LTV resi deals, cuts BTL rates
Metro Bank has reintroduced its 95% loan-to-value (LTV) products and made reductions in fixed-rate deals for both residential and landlord offerings. Notable changes in the residential sector include the reintroduction of 95% LTV for purchases, starting from two years at 5.99% and five years at 5.79%.
