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Mortgage market review - January 2017


Mortgage market update for January 2017.

Macro news and drivers

Government confirms thousands of new starter homes
Thousands of starter homes to help first-time buyers get on the property ladder will be built this year, ministers have announced. The government has confirmed that 2017 will see the first starter homes being built on brownfield sites in 30 local authorities across the country.    
Mortgage approvals hit 8-month high in November
UK mortgage approvals rose to an eight-month high in November, according to the latest Bank of England lending statistics.   
Estate agents worried mortgage lending restrictions are damaging the housing market
New research has revealed that two out of five estate agents believe that mortgage lending restrictions on over-55 customers are causing problems in the housing market..    
UK house prices rise but growth expected to slow in 2017
Despite house prices rising for the fourth successive month in December, growth is expected to slow in 2017 as a decline in the economy and a squeeze on spending power start to bite.    

Regulation and legislation

Property prospects post-Brexit
The short-term effects of the Brexit vote were probably over-estimated, but the long-term impact may have been underestimated. The Bank of England showed its determination to reduce the risk of recession by cutting already rock-bottom interest rates, although the fall in sterling and almost certain rise in inflation means a further reduction is unlikely before the new year.    
Govt opens £7bn affordable housing programme
Communities Secretary Sajid Javid has opened the Government's £7 billion expanded affordable housing programme. Previously announced by the Chancellor in November's Autumn Statement, housing providers can now apply for a share of the fund, which was allocated an additional £1.4 billion to deliver 40,000 new affordable housing starts across the country.    

Product developments and innovation

Aldermore revamps residential mortgage range
Aldermore has lowered rates on many of its products and launched a replacement for the Help to Buy mortgage guarantee scheme. Its new range for buyers with a 5% deposit includes a two-year fix with an interest rate of 4.98%.     
Mansfield launches 75% LTV buy-to-let range
Mansfield Building Society has launched a buy-to-let range up to 75% LTV and updated its rental income criteria in response to the Prudential Regulation Authority's (PRA) new underwriting standards.    
Accord offers customers £1,000 boost
Accord Mortgages is giving borrowers who opt for an offset mortgage a £1,000 boost when their home loan completes. The incentive is designed to help borrowers to reduce the amount of interest they have to pay on their mortgage, and is available for a limited time.    
Scottish Widows launches re-mortgage range
Scottish Widows Bank has launched a new range of re-mortgage products, including the option to offset. The range includes both two and five-year fixed products with rates starting from 1.29 per cent.    

Coventry offers lowest ever fixed rate mortgage
Coventry for Intermediaries has launched is lowest ever two-year fixed rate mortgage at 1.29 per cent. For a loan-to-value (LTV) of 50 per cent it will offer a 1.29 per cent rate for residential mortgages for two years with a £999 fee.    

Consumer trends

Luton tops the table for house price growth in 2016
Luton is rapidly becoming one of the most desirable places to live in the UK, with house prices soaring more than anywhere in the UK over the past year. This is more double the 7.5% increase in the UK as a whole.    
Landlords expect to be hit by tax relief changes and affordability checks
More than half of landlords believe they will be hit by the forthcoming changes to both income tax relief and stricter mortgage affordability checks, according to new research.   
Shared ownership properties out of reach for most first-time buyers
Shared ownership schemes are failing to help first-time buyers get on the property ladder because they are too expensive, according to new research by Which? Mortgage Advisers.   
Experts corner
Market watch: new year, new insight?
Welcome to the bright and shiny New Year. Like the opening day of the football season, the first couple of weeks bring a fresh dose of optimism that we must all hang on to, no matter what. It is set to be an interesting year, with the usual twists and turns along the way...