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Mortgage market review December 2016

Mortgage market update for December 2016

Macro news and drivers

Inflation figures to include housing costs
The Office for National Statistics is to include housing costs in its headline measure of inflation from March next year. Following a consultation, the ONS has decided to switch its preferred measure of inflation from the consumer price index to the consumer price index including owner occupier's housing costs  from March.  
House price rises pause in October
UK house prices were stable in October after fifteen successive monthly increases, data from the Nationwide House Price Index reveals.

Housing market shows signs of weakness
Post-Brexit vote uncertainty could cause further weakness in an already softening housing market, figures from the British Bankers Association have suggested.  

Housing demand climbs despite Brexit jitters
Concerns over the UK's impeding divorce from the European Union have not stalled the demand for housing, as a report points to the "dire" shortage of British properties.  

Regulation and legislation

FCA contemplates new mortgage rules for upfront rewards
The intellectual challenge of regulating mortgage offers that give consumers an upfront gain for a long-term loss were discussed on Friday (4 November) by Peter Andrews, chief economist at the FCA.  
CBI tells government how to fix housing shortage
The Confederation of British Industry has come up with a range of initiatives to help the government meet its ambition of building one million new homes by 2020. 
High Court ruling on Article 50 will hit homebuyer confidence
The decision by the High Court on whether the UK government can trigger Article 50 and start the process of leaving the EU is "unwelcome news" for the residential property market, warns one of the UK's leading estate agents.  
Lenders call for 'last-time buyer' backing from regulators
Lenders need reassurances from regulators over an approach towards older "last-time buyers", the Council of Mortgage Lenders has said. Speaking at the CML's annual conference last week, the trade body's head of policy June Deasy said there were challenges for lenders as the UK's population ages.  

Product developments and innovation

TSB launches mortgage range for first-time buyers
TSB has launched a range of mortgages for first time buyers, with no product fees and £750 cashback, to help them take their first step on the property ladder.  
Nationwide launches 5 year tracker mortgage
Nationwide Building Society has announced the launch of a five year tracker mortgage which will be available from today (9 November). Rates for the 60 per cent loan-to-value product start at 1.89 per cent with a £999 fee.  
New buy-to-let mortgage from together aimed at sub-prime market
Specialist lender Together has unveiled a sub-7 per cent first-charge buy-to-let mortgage for borrowers with a 35 per cent deposit.  
Fleet mortgages revamps its range of products for individuals and firms
Buy-to-let specialist lender Fleet Mortgages has refreshed its entire product range for individuals, limited companies and those seeking finance for HMOs and multi-unit blocks.  
Santander launches fee-free fixes and H2B equity loan products
Santander has launched a range of two and five year fixed re-mortgage products with no product fees. The new products are available on products at 60, 75, and 85 per cent LTV, with interest rates ranging from 1.64 per cent for a two-year 60 per cent fix, to 2.34 per cent for a five-year 85 per cent remortgage deal.  
Yorkshire Building Society launches its lowest ever rate
Yorkshire Building Society has launched a 0.98% two-year discounted standard variable rate mortgage - its lowest ever rate.  

Consumer trends

Brexit hits first-time buyers hardest
First-time buyers were hit hardest in the three months following the UK's vote to leave the European Union, according to analysis by AmTrust and Moneyfacts.  
Equity release sees year-on-year rise
The amount lent through equity release is set to hit an all time high of £2bn in 2016, according to the Equity Release Council. For the first nine months of the year £1.48bn has been lent for all products, and if the figure of £2bn is broken this will represent a 26 per cent rise on 2015's total figure of £1.61bn.
Downsizers have unrealistic expectations
According to Key Partnerships, 72% of estate agents believe older homeowners have unrealistic expectations about the money they can make from downsizing.

Experts corner

Making mortgage advice easier through technology
It has become far more difficult for mortgage advisers to provide potential borrowers with certainty their loan will be accepted in a post-MMR world. For the client, it can a very emotional process.

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