The Mortgage Store Updates

🏦 Bank of England Governor Andrew Bailey Says Rate Cutting Could be “More Aggressive”. The Governor said on Wednesday that there was room for the Bank to be a “bit more aggressive” on cutting the Base Rate, if inflation continues to move in the right direction. There are many other factors at play, such as the current tensions in the middle east, so this is far from a foregone conclusion. The mortgage industry reacted positively to the news, suggesting that rates could drop to the low 3%’s, buy the end of the year, which would be great news for home-movers and homeowners alike.

 

🎉 HSBC Improve Foreign National Policy. Under previous rules, to access the 95% LTV range, both borrowers applying for a mortgage had to have leave to remain in the UK or have EU settled status. This has been reduced to one borrower. Other changes to the bank’s lending policy for foreign nationals include increasing LTVs from 75% LTV to 85% LTV for foreign nationals without permanent residency. They must be able to prove they have lived in the UK for a minimum of one year, or evidence they have a minimum income of £75,000 a year or a joint annual income of £100,000.

 

🏠 New Sales Agreed 25% Higher, as Buyers Return to the Market. The lowest mortgage rates in 15 months have driven a marked increase in demand, with agreed sales 25% higher than the same period last year. This demand is being met, buy more motivated home-movers along with investors and second homeowners selling in anticipation of possible tax changes, in the upcoming budget.

 

💭 The Mortgage Store - Mortgage Series. This week has seen us focus on getting ready for a mortgage application. In this video our Training & Development Manager Rhys Cox explores the benefits of being prepared!

 

📈 Mortgage Market Gearing up for FTB Boom? First-time buyers are taking centre stage in the mortgage market, as lenders seek to woo buyers with lower rates and improved criteria. This article from Simon Meadows at Mortgage Introducer, sums it up quite nicely!

 

🏦 Nationwide Improve Income Multiples. Nationwide will now allow borrowing up to 6 x income, via their “Helping Hand” Range. Meaning borrowers with an income of £30k, or joint borrowers with an income over £50k, could get a boost to their borrowing power. The deals available for this will be either 5-year, or 10-year, fixed rates.

 

🌶️ Pepper Money Improve Self-Employed Criteria. The specialist lender has always been good, but this latest improvement, means self-employed borrowers that retain profit within their limited company, will be able to use that to improve what they can borrow, giving them the ability to use their full earnings to help secure a mortgage.

 

⏲️ Lender Application Processing Times Reduce. On average the time to offer with lenders has fallen from 14 days to 10 days over the last 2 years. While there is some way to go for lenders to recapture their peak, it’s encouraging that, heading into a busy period, there are signs of improving service.

 

📉 Average 2-year Fixed Fates fall 1.14% in a Year. The Average 2-year fixed rate is now 4.93%, down from 6.07% a year ago, with 2-yer fixed rates now starting below 4% again. The market is definitely improving fast and with a further cut to the base rate on the horizon, it’s a good time to be buying!

 

💭 The Mortgage Store - Mortgage Series. This week has seen us focus on the benefits of Shared Ownership. In this video I explore the benefits of buying a Shared Ownership Property.

 

📈 Inflation holds at 2.2%. Inflation was 2.2% in the year to August, unchanged from July and below the Bank of England’s forecast of 2.4%. Upward pressure come from transport costs, with air fares and second-hand cars pushing this figure upwards. With services and CPI inflation also increasing, offsetting falling goods inflation. Broadly speaking this is good news as it shows inflation is not showing any signs of surging again.

 

🏦 Bank of England Base Rate held at 5.00%. Considering the above news, it’s unsurprising that the base rate was left on hold, at least for another month. This was widely expected and although a cut would be welcome, the Committee’s decision has been guided by “the need to squeeze persistent inflationary pressures out of the system”. With further data releases between now and the next meeting it remains to be seen if we will see a cut I November, it is expected that there will likely be another cut before the year end.

 

📉 What Does it Mean for Mortgage Rates? We’ll likely see the current trend for reducing rates find a point at which the best rates stop reducing, while the rest of the market catches up. The most interesting news can be seen in a return to sub-4% rates on 2-year fixed rates, with SWAP rates continuing to fall, giving the impression that lenders are already pricing in another base rate cut before the end of the year.

 

🏠 UK Has a Shortfall of 4.3m Homes. The long-term failure to meet housebuilding targets, is now a key policy issue. While we should acknowledge the pledges made by the new government, actions, not words, are needed to deliver not just over the next 5-years, but for the next generation and beyond.

 

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