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Mortgage market review August 2017

Mortgage market update for August 2017

MACRO NEWS AND DRIVERS

Surge in remortgage activity ahead of potential rate rise
One out of every three property valuations came from owner occupiers or landlords remortgaging in June, new research shows. According to the latest research from Connells Survey & Valuation, growth in remortgage valuations is seven percentage points above the five-year average for June.
http://www.financialreporter.co.uk/mortgages/remortgaging-becomes-most-active-sector-as-ftb-figures-dip.html          
 
Property transactions dip to lowest level in eight months
According to figures from HM Revenue and Customs, the number of residential property transactions fell by 3.3% to 96,910 between May and June - the lowest since October 2016.
https://www.whatmortgage.co.uk/news/property-transactions-dip-lowest-level-eight-months/              
 
City house prices set to surge by up to 7% despite Brexit
City house price growth is set to shake off Brexit uncertainty, rising by reach 6-7% over the course of the year. Hometrack said it had raised its 4% prediction made in December due to the continued growth in large regional cities outside London and the South East.
http://www.independent.co.uk/news/business/news/uk-house-prices-latest-increase-7-per-cent-brexit-income-squeeze-housing-market-a7851516.html          
 
Mortgage lending goes up but there could be trouble ahead
UK Finance has warned that a further deterioration in the economy is likely to "dampen" first-time buyer and remortgage activity. The new trade association, which has replaced the Council of Mortgage Lenders, said that gross mortgage lending is up 3% on last year at £22.1 billion.
https://www.ukfinance.org.uk/gross-mortgage-lending-22-1-billion-in-june/    
 
Help To Buy is pushing up prices for first-time buyers in london
The London housing market is being badly distorted by the £600,000 upper threshold of the Help To Buy scheme which is pushing prices up for first-time buyers, new research has revealed.
http://www.propertyindustryeye.com/help-to-buy-has-pushed-up-prices-for-first-time-buyers-agent-claims/          
 
Small deposit borrowers could see mortgage availability worsen
Borrowers looking to take out a mortgage with a small deposit could find it more difficult to get a loan in the coming months, a new survey from the Bank of England suggests.
https://www.whatmortgage.co.uk/news/small-deposit-borrowers-see-mortgage-availability-worsen-boe-survey/             
 
House price growth slows again but market remains resilient
House prices went up 4.7% in the year to May, down from April's figure of 5.3%, new figures show. According to the latest data from the Office for National Statistics, house prices rose £1,000 in May, taking the average value of a property in the UK up to £221,000.
https://www.theguardian.com/money/2017/jul/18/uk-house-prices-rise-5-percent          
 
Mortgage costs come down in second quarter
New data has revealed that the majority of mainstream mortgages have come down in cost over the past three months. According to Mortgage Brain, the cost of a five-year fixed mortgage for borrowers with a 30% deposit is 2% lower than it was at the beginning of April.
https://www.mortgagestrategy.co.uk/mainstream-mortgage-prices-fell-q1-mortgage-brain/     

REGULATION AND LEGISLATION

New proposals to make mortgage switching easier could save borrowers £15 billion
Online mortgage broker Trussle is proposing a new set of industry standards to make it easier for borrowers to switch their mortgage. Its white paper identifies several shortcomings in the mortgage market which are exacerbating this inertia, some of which are expected to be addressed in the FCA's soon-to-be-published Mortgage Market Study.
https://www.finextra.com/pressarticle/70082/trussle-calls-for-mortgage-switch-guarantee

PRODUCT DEVELOPMENTS AND INNOVATION

Teachers building society adds new options to its family mortgage
Teachers Building Society has added new options to its Family Mortgage to help families support their relatives on the property ladder. These options allow family members to gift a deposit to loved ones who are struggling to save a deposit for a property and can be used on mortgages up to 95% LTV.
https://www.teachersbs.co.uk/news/press-releases/details/2017/07/18/teachers-building-society-launches-new-family-mortgage-options          

Accord expands buy-to-let range to first-time landlords
Accord's buy-to-let mortgage range is now available to those buying a property to let for the first time. Accord's standard buy-to-let lending criteria will apply to new landlords, including a minimum requirement of a 25% deposit. Applicants must also own their own residential home and pass credit checks.
http://www.mortgagesolutions.co.uk/news/2017/07/14/accord-opens-criteria-first-time-landlords/         

Skipton unveils 0.99% mortgage
Skipton Building Society has unveiled its first fixed rate mortgage below 1%, ramping up the competition between lenders. The two-year fixed rate mortgage has an interest rate of 0.99%. It comes with a fee of £1,995 and is available for borrowers with a 40% deposit or more.
https://bestadvice.co.uk/the-skipton-offers-sub-1-rates-for-first-time/          

Nationwide ditches free legals after criticism
From today (13 July) the nation's biggest building society has ditched free legals after the service came under fire from a broker back in May who claimed their client may require compensation after their fees-free remortgage through Nationwide was delayed by more than a month, leaving them paying the standard variable rate for longer than expected.
https://www.ftadviser.com/mortgages/2017/07/13/nationwide-ditches-free-legals-after-criticism/         

Metro bank cuts rates on fixes and trackers
Metro Bank has cut rates across a range of its fixed rate and tracker products by up to 0.2 percentage points.
https://www.ftadviser.com/mortgages/2017/07/20/metro-bank-cuts-rates-on-fixes-and-trackers/

CONSUMER TRENDS

Overseas landlords pull out of the uk as low price growth and taxes bite
The proportion of overseas-based landlords in Great Britain hit a record low in 2017, driven by low expectations of price growth and tax changes. According to Countrywide, overseas landlords owned 5% of all homes let in the UK in 2017, down from 12% in 2010.
https://www.ftadviser.com/Articles/2017/07/17/Overseas-landlords-set-sail-from-UK          
 
First-time buyers are failing to budget for home buying fees and costs
First-time buyers are failing to budget for the cost of buying their first home, with the likes of surveys, valuations and legal fees costing 73% more than anticipated, a new survey shows. According to home builder Barratt Homes, over half of first-time buyers are spending £4,955 on average on the fees and costs of buying a home.
https://www.whatmortgage.co.uk/news/first-time-buyers-failing-budget-home-buying-fees-costs/
 
Affordability bigger barrier to home ownership than in 2008
Affordability is a significantly bigger barrier to home ownership now than the last time figures were compiled in the midst of the financial crisis, a survey by the Department for Communities and Local Government has found.
https://www.ftadviser.com/mortgages/2017/07/13/affordability-bigger-barrier-to-home-ownership-than-in-2008/

EXPERTS CORNER

Is the softening housing market just temporary?
The mortgage market has had a turbulent 2017 so far and, at the half-way mark, many think it may have to withstand further storms...
https://www.mortgagestrategy.co.uk/cover-feature-softening-housing-market-just-temporary/

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