Catch up on Mortgage Strategy’s most popular stories this week. Family Building Society CEO labels BoE rate rises ‘an act of insanity’ and the industry reacts to Bank of England rate rise. Read more below:
Family Building Society CEO labels BoE rate rises ‘an act of insanity’
The head of the Family Building Society has criticized the possibility of a 14th consecutive Bank of England base rate rise this week, calling it “an act of insanity.” Economists remain divided on the course the central bank’s rate-setting Monetary Policy Committee will adopt at Thursday’s meeting.
Industry reacts to Bank of England rate rise
The Bank of England’s Monetary Policy Committee (MPC) has implemented its fourteenth consecutive base rate rise today. The MPC raised the base rate by 0.25% to 5.25%, marking the highest borrowing cost since the 2008 financial crisis.
TSB grants mortgages on blocks without EWS1 forms
TSB has announced that it will offer mortgages without requiring an EWS1 form for flats or blocks that have received approved government-backed or developer funding for cladding or external wall system repairs. Brokers should inform TSB’s application processing team in their submissions, and the team will then conduct the necessary internal checks.
Halifax extends maximum working age for mortgage borrowers
Starting 1 August, Halifax will raise the maximum working age (MWA) using earned income from 70 to 75 years of age. This change aims to support customers who are willing and capable of continuing their current occupation beyond the age of 70. The increased MWA will be applicable to both employed and self-employed customers.
Consumer Duty arrives – is tech key to compliance?
The Financial Conduct Authority’s (FCA) Consumer Duty regulation comes into force today. This new regulation introduces a more outcomes-focused approach to consumer protection, raising the standards of care that firms must provide to their customers, as outlined by the FCA earlier this year.
How far will BoE raise rates this time?
The Bank of England’s Monetary Policy Committee is widely anticipated to implement its fourteenth consecutive rate rise later today, potentially taking the borrowing cost above 5% – the highest rate since the 2008 financial crisis. This situation spells more difficulties for those with variable rate mortgages and poses a challenge for those transitioning from low fixed-rate deals as well.
UK house prices continue to cool: Nationwide HPI
In July, house price growth remained negative, with prices falling by 0.2% month-on-month, according to the Nationwide House Price Index. The annual rate of house price growth stood at -3.8%, down from -3.5% in June. Nationwide’s chief economist, Robert Gardner, cited the volatile views of investors on the likely path of UK interest rates, with the projected Bank Rate peak fluctuating between 5% and 6.5% in recent months.
Average fixed rates drop first time since April: Rightmove
Average fixed rates are showing signs of easing, offering some relief to borrowers facing pressure. According to Rightmove’s mortgage expert Matt Smith, both five-year and two-year fixed products have experienced their first weekly drop since mid-April. The improvement comes as more positive economic news filters through to the mortgage market, leading lenders to cautiously reduce rates.
Impact of potential base rate rise revealed
UK Finance has shared the potential impact of another Bank of England (BoE) base rate increase on the average variable rate mortgage. Although UK inflation has decreased from 8.7% to 7.9%, many economists predict a possible 0.25% or 0.5% increase in the base rate during the upcoming BoE meeting. The current base rate is at 5%.
The Mortgage Works cuts BTL rates by up to 0.85%
The Mortgage Works (TMW) has lowered buy-to-let rates in its switcher range for existing customers. The reductions reach up to 0.85% on selected two, three, five, and ten-year fixed rate products. Additionally, TMW offers a two-year tracker rate at 5.04% for up to 65% loan-to-value (LTV).
