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Mortgage market review August 2018

Publication date:

14 August 2018

Last updated:

04 September 2018


Technical Connection

Mortgage market update for August 2018


UK house prices experience ‘modest rebound’ in July - UK house prices bucked expectations in July by rising more than economists’ forecast in a “modest rebound” for annual price growth in the market, mortgage lender Nationwide said on Wednesday.

Base rate rises to 0.75% - This is only the second time there has been an interest rate rise in a decade and the first time the rate has been above 0.5% in that time which means many people could be in for a shock as they will have not experienced such an increase and will therefore need to adjust their current spending to accommodate any increases in their monthly repayments.

The base rate rise won’t have an immediate effect on rates - The Bank of England’s decision to raise the base rate from 0.5% to 0.75% won’t have an immediate effect on mortgage rates, lenders argued. The Monetary Policy Committee’s unanimous vote meant that this is the highest the rate has been for nine years.

London first-time buyers pay 13 times salary for a home - Aspiring first-time buyers in the capital last year could expect to spend 13 times their earnings on property, compared with 5.5 times in the North East. London was, not surprisingly, the least affordable region for prospective first-time buyers in 14 of the last 19 years, with the North East the most affordable for 18 of the last 19 years.

London lettings cool as the North sees best yields, reports agency - The latest Your Move rental tracker suggests that London’s lettings market has continued to cool with prices falling by 0.5 per cent in the last 12 months, while canny investors in the north of England have seen the highest yields of anyone in the UK.

The “double whammy” hitting the UK housing market - It’s now generally agreed that the dramatic rise in property prices of the last five years has come to an end – the seasonally adjusted Nationwide house price index peaked at the start of the year in nominal terms and has been declining in real terms since last summer. In a reversal from previous trends, London prices have been doing much worse than the rest of the country.

First-time buyers saved £284m in stamp duty since Budget cut, Treasury says, but they still face a £25,000 deposit hurdle to get on the property ladder - More than a hundred thousand first-time buyers have saved on average £2,337 each in tax since the stamp duty exemption was introduced last November, Treasury figures reveal.


Differences between commercial and residential property investing - Following the Investment Association’s (IA) decision to split its Property sector into separate UK Direct Property and Property. Other sectors from 1 September 2018, what are the differences between investing in commercial and residential property?


Legal & General announce lifetime mortgage deal with Virgin Money - Legal & General Home Finance has signed a five-year partnership deal with Virgin Money that will allow Virgin’s interest-only customers to access Legal & General’s lifetime mortgage product range.

Nationwide increases savings and mortgage rates - In response to the bank rate increase of 0.25 per cent, the building society will implement its rate changes as of 31 August for savings accounts and 1 September for mortgages.

More people remortgaging due to split with partner - According to figures from conveyancing service provider, LMS, the number of remortgages taken out as a result of break-ups in May made up 5% of the market, up from 2% on the previous month.

Retired downsizers struggling to sell homes - Estate agents are seeing a surge in inquiries about downsizing from retired homeowners with 1.4 million over-65s saying they will consider downsizing in the next five years, equity release adviser Key has found.

Survey finds that banning gazumping is top housing policy change wanted in Britain - There are lots of new measures and policies which have been or are being introduced by the British Government but new research shows that the top desire is action to prevent gazumping.

FCA welcomes lenders’ pledge to help ‘mortgage prisoners’ - The FCA has welcomed a commitment from three mortgage industry bodies to help borrowers tied to reversion rates switch products.

Buy-to-let Watch: Is consultation too much to ask? - The lettings industry has been the focus of intense scrutiny of late. This can be taken one of two ways. On the one hand, it is evidence that the government is recognising the importance of the rental sector. Indeed, in the Housing White Paper, published last year, it was clear that renting was being given more attention than it previously had been in the political world.

This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), the CII group, local institute or Society, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the CII group, local institutes, or Societies.


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