Stay updated with this week’s top stories on Mortgage Strategy: The Bank of England maintains rates at 5.25% – insights from the industry and a 13% surge in house sales reported for January. Explore further:
BoE keeps rates at 5.25% – industry reaction
As anticipated, the Bank of England, mirroring the ECB and Fed, opted to maintain its base rate. The Monetary Policy Committee upheld rates at 5.25%, maintaining the level set in September, following 14 consecutive increases from the historic low of 0.1% in December 2021. Given the current 4% inflation, double the BoE’s 2% target, there was evidently a minimal inclination to ease policy.
House sales jump 13% in January: Zoopla
House sales have surged 13% across all regions compared to the previous year, propelled by sub-5% mortgages and pent-up demand, according to data from Zoopla. The increase marks a “positive start” to the year, signalling the resurgence of pent-up demand after a sluggish second half of 2023, characterized by many buyers deferring moving decisions amid increasing mortgage rates, states Zoopla’s January House Price Index.
Santander mortgage lending slumps £11.9bn in 2023
Santander UK’s mortgage lending declined from £25 billion to £13.1 billion in the past year, citing higher funding costs and a slower housing market. The bank attributed the reduction to decreased applications in 2023, influenced by both elevated mortgage rates and a subdued housing market. As part of its strategy to optimize the balance sheet amid higher funding costs, Santander implemented measures resulting in a substantial £11.9 billion reduction in mortgage lending.
Legal & General unveils new lifetime mortgage pricing
Legal & General Home Finance has unveiled a personalised approach to lifetime mortgage pricing, aiming to offer customers the most favourable rates tailored to their individual circumstances. The new pricing strategy, effective from January 29, involves customised decisions considering all the information provided by customers.
BoE rate decision: ‘Lenders pause for breath’
The Bank of England maintained its base rate at 5.25%, in line with expectations, while offering limited insight into potential future reductions. The Monetary Policy Committee expressed concerns about persistent inflation at 4%, hindering the achievement of the central bank’s 2% target.
Principality BS cuts rates by up to 45bps, other fixes rise as swaps lift
Principality Building Society is set to reduce specific fixed-rate deals on residential house purchases and landlord ranges by up to 45 basis points starting February 1. Concurrently, the mutual will adjust prices on other home loans in response to the upward movement of swap rates. Two-year sonia swap rates increased from 3.99% on December 29 to 4.27% on Friday, while five-year sonia swap rates rose from 3.34% to 3.74% during the same period.
Homeowners lack cover in event of illness: Royal London
A Royal London report reveals that 8 in 10 UK homeowners lack income protection for monthly mortgages, and two-thirds lack coverage for critical illnesses, putting their financial stability at risk in case of prolonged illness.
Paragon adds five-year BTL fixes from 4.89%
Paragon Bank updates its buy-to-let range with five-year fixed rates. Starting at 4.89% for green-rated single self-contained properties, rates increase to 4.94% for less energy-efficient homes and 5.14% for Houses in Multiple Occupation and Multi-Unit Blocks.
Number of First-time buyers over 50 increases by 30%
First-time homeowners over 50 have surged by 30% in the past 5 years, reaching 12,000 in 2022, marking a rapid growth segment in the first-time buyer market, according to Tembo. The overall number of first-time buyers averaged a 1% annual increase since 2018, totalling 360,000 in 2022.
Home sellers opting for quick sales: Open Property
Home sellers are turning to quick sale platforms to avoid the complexities of the traditional property selling process, according to data from Open Property Group. With over 1,400 quick sale transactions completed via the platform, the primary motivation for sellers is to bypass the challenges associated with conventional sales. These platforms offer a rapid transaction process, enabling sellers to choose a completion date that suits their needs, aiming for a quicker turnaround, often within days.
