Catch up on Mortgage Strategy’s most popular stories this week. TSB pulls 2-year resi and remo deals in ‘urgent withdrawal’ and Bank of England set for an extended period of rate holds. Read more below:
TSB pulls 2-year resi and remo deals in ‘urgent withdrawal’
TSB pulled a broad range of two-year home loans at 6 p.m. on October 24 in an “urgent product withdrawal” ahead of a repricing. This covered two-year purchase and remortgage fixed-rate deals up to 75% loan to value, with a £995 fee. The bank later reintroduced these products on October 26 and informed brokers of these changes on October 25.
Bank of England set for extended period of rate holds
Analysts anticipate that the Bank of England will maintain the interest rates at 5.25% in the upcoming week, signalling a continued pause in rate hikes. A Reuters survey, which included over 70 economists, revealed that 61 of them expected no changes from the Bank of England in the following week.
The recent inflation data, published over the past month, has reduced the likelihood of the Bank proceeding with additional rate increases. Prices have remained stable, and there is a widespread expectation that they will begin to decline starting this month.
Autumn Statement options could assist first time buyers
There are indications that the upcoming Autumn Statement may include a plan to extend the mortgage guarantee scheme in order to assist first-time buyers. Ben Thompson, Deputy CEO of the Mortgage Advice Bureau, highlights that it has been a difficult period for first-time buyers in their quest to become homeowners. Economic instability has led potential buyers to grapple with elevated inflation, driving up prices and constraining their savings capacity.
Barclays’ profits fall as mortgage margins come under pressure
In the third quarter, Barclays reported a 4% decrease in pre-tax profit, amounting to £1.9 billion. This decline was attributed to mortgage margin pressure and reduced deposits, which outweighed the benefits of higher interest rates. Additionally, the bank disclosed a 2% drop in group revenue from the previous year, amounting to £6.3 billion. This was attributed to “mortgage margin compression and lower current account deposit volumes, in line with broader market trends and the impact of cost-of-living pressures.”
Santander mortgage lending slumps £10bn in 2023
Santander UK reported a significant drop in mortgage lending by £10.1 billion during the first nine months of the year. This decline is attributed to a slower housing market and increased mortgage rates. The bank mentioned that the reduced demand for home loans resulted in fewer mortgage applications in the period ending September, prompting them to optimize their balance sheet due to higher funding costs.
Halifax introduces 3-year remortgage offers
On October 20, Halifax Intermediaries introduced three-year fixed-rate remortgage products. This decision was prompted by borrowers seeking more affordable alternatives, with 800,000 fixed-rate deals set to expire in the second half of the year, as reported by UK Finance, a banking trade body. Additionally, approximately 1.6 million deals were expected to conclude in 2024.
Santander cuts resi, BTL rates by up to 56bps
On October 24, Santander reduced certain new business and product transfer fixed-rate residential and tracker rates by up to 56 basis points. The high street bank simultaneously introduced three-year buy-to-let fixed-rate options at up to 75% loan-to-value, with or without a product fee, making them accessible to both new customers and those seeking a product transfer.
Industry surprised by govt’s no fault eviction delay
The government has indefinitely postponed the planned ban on “no-fault” evictions. Housing Secretary Michael Gove informed MPs that the ban on section 21 evictions will not be implemented until various legal system enhancements are in place. Labour has criticized the government, alleging that they made a “shady arrangement” to secure the backing of Tory backbenchers, which they view as a betrayal of renters.
London market turns corner following mini budget slump: Foxtons
A year after the mini-budget that contributed to the property market’s downturn, the capital has seen a positive change. There has been increased activity that is reinvigorating the market, as indicated by recent research conducted by the estate agent, Foxtons. The research examined the state of the London market since the September 2022 mini-budget, its effects, and the recent resurgence in market activity.
Selina Finance launches pre-consent funding on second charge loans
Selina Finance, the second charge lender, will now provide loans of up to £100,000 without requiring consent from the first-charge lender as a precondition. This new feature is exclusively available to clients under the ‘Status 0’ plans, which includes individuals with no adverse credit history or those who have missed only one payment in the last 12 months. To qualify for this, borrowers must also have their primary mortgage with one of the following mainstream lenders: Halifax, NatWest, Santander, Nationwide, Skipton Building Society, Barclays, Coventry Building Society, Leeds Building Society, HSBC, Birmingham Midshires, Clydesdale, Accord Mortgages, Lloyds Bank, Royal Bank of Scotland, Yorkshire Building Society, Bank of Scotland, TSB, and Virgin Money.
