Mortgage market update for March 2018, including; news, regulation and legislation, product development and innovation, consumer trends and experts corner.
MACRO NEWS AND DRIVERS
Spring Statement 2018: plans to build more homes on track - Plans to build more homes and tackle the UK’s housing challenges are on track, the Chancellor of the Exchequer Philip Hammond said in today’s Spring Statement. He announced London would benefit from a £1.67 billion cash injection to fund the building of 27,000 affordable homes by the end of 2021 to 2022.
UK housing stock hits record low as buyer demand wanes - The average number of properties on estate agents' books has hit a record low and is "unlikely to improve", according to a survey by the Royal Institution of Chartered Surveyors (Rics). While a typical estate agent has 42 homes on their books per branch, in London – where the nation's chronic housing shortage is most concentrated – the figure is just 33.
‘Most affordable’ mortgages offset by house price growth - Current mortgages are deemed the “most affordable” they have been in a decade but persistent house price growth means affordability has declined in recent years. New research from Halifax found homeowners spent less than a third (29 per cent on average) of their disposable income on mortgage payments in the fourth quarter of 2017, compared with almost half (48 per cent) in 2007 (Q3).
January remortgage lending at nine year high - Remortgage lending reached a nine-year high in January, while the number of first-time buyers and home movers both increased compared to January 2017, according to new UK Finance data.
More mortgages for borrowers with 5% deposits - There has been an upturn in the number of 95% loan to value (LTV) mortgages on the market, boosting the range to its highest level since the financial crisis.
REGULATION AND LEGISLATION
Treasury mulls help to buy loan book sale - The government is looking at selling its £7.39bn Help to Buy loan book, as borrowers start to pay fees on the debts used to secure homes, reports suggest.
Five jailed over £9m mortgage application scam - Five people who participated in a mortgage application scam potentially worth £9 million have been sentenced at Cardiff Crown Court.
PRODUCT DEVELOPMENTS AND INNOVATION
Virgin revamps buy-to-let and residential deals - Virgin Money is offering a £750 cashback incentive on buy-to-let renewals this Spring. The lender is targeting landlords coming to the end of their existing deals in the coming months and has also launched a range of 90 per cent loan-to-value (LTV) residential mortgages, up from its typical maximum loan-to-value of 75 per cent.
Accord takes axe to 21 mortgage rates - Accord has slashed its rates on 21 mortgages by up to 0.23 per cent to help more people get onto the property ladder. The intermediary-only lender is giving first-time buyers and borrowers with smaller deposits a helping hand by now offering a fee-free 3.99 per cent two-year fixed rate mortgage at 95 per cent loan-to-value (LTV).
Coventry changes loan-to-value limits - Coventry for intermediaries has changed its loan-to-value limits on mortgages up to £2m. The society will now lend up to 90% loan-to-value on loans from £250,000 to £500,000, with it previously lending to 90% LTV from £250,000 to £400,000. Previously it lent up to 75% LTV from £1m to £2m, but it will now only lend up to 65% LTV from £1.25m to £2m.
Tesco under fire pulling higher LTV deals – A financial adviser has been left "fuming" after Tesco withdrew all higher loan-to-value mortgage products, meaning his customers missed out. Bob Riach, proprietor of mortgage brokerage Riach Financial in Scunthorpe, had obtained agreements in principle for customers on Tesco mortgages, before discovering that all rates above 85 per cent loan-to-value had been withdrawn.
Aldermore reports lending up amid cooling mortgage market – Challenger bank Aldermore has announced a mid-teens growth in lending, amid a backdrop of a cooling mortgage market.
Demand for specialist residential mortgages driven by complex customer needs - Demand for specialist residential mortgages is being driven by a diverse set of customer needs, principally from the self-employed, and not by adverse credit. Paragon’s Q4 2017 Financial Adviser Confidence Tracking (FACT) Index report found intermediaries thought self-employed customers were the most difficult to find solutions for. This represents one in five of all cases (21%).
Growth in homeowners improving instead of moving - More people are investing in their current home instead of moving because of economic uncertainty and high property prices, a report has revealed.
Housing Watch: It’s time to take a long-term view - Homeownership is increasingly out of reach for many, particularly young people, but joined-up policies would make all the difference.