Confidence in UK housing market cooled in November – Halifax
The survey found that just 14 per cent of those asked in November felt the value of their home rose over the last month, compared to 17 per cent in both September and October.
However, confidence remains significantly higher than the low of four per cent recorded during the first national lockdown in May.
The outlook for house prices is stable, with more than a quarter of owners believing their home will be worth more in 12 months’ time than those who think it will be worth less.
The research also showed that insufficient savings remain the biggest barrier to buying a home.
Halifax managing director Russell Galley said: “UK households remain broadly confident in the strength of the property market.
“The perceived rate of house price growth weakened slightly during November but is nonetheless above average and a noticeable reversal from the period of negative sentiment we saw between April through to August.
“People also remain cautiously optimistic that property prices across the country will be higher in 12 months’ time. However, expectations softened from October, and remain subdued by historical standards.
“This is unlikely to change significantly while the macroeconomic landscape remains uncertain, with most housing market experts predicting greater downward pressure on house prices as we move into 2021.”
Top 10 biggest mortgage broker stories this week – 20/11/2020
IMLA revealed to Mortgage Solutions it had sought the regulator’s help over competition rules.
Meanwhile, lenders’ criteria and LTV changes continue to dominate the top spots. Elsewhere, the revised Help to Buy scheme will soon be open for applications and new temporary regulations to protect renters means they can accrue close to 18 months’ arrears without sanctions.
Here’s what made the top ten stories this week.
Lenders seek FCA permission to re-enter high LTV mortgages at same time
Accord brings back 90 per cent LTV mortgages with permanent range
Tenants can accrue 18 months’ arrears with no eviction under temporary rules
Revised Help to Buy scheme open to applicants from December
Lenders offering smaller loans but first-time buyer affordability improves – MBT
Nationwide expands interest-only mortgages to purchase via brokers
Halifax and Platform relaunch 85 per cent LTV mortgages
Santander cuts low LTV residential and BTL rates
Cladding and building safety guidance ‘not designed for valuations’ – housing minister
New blood needed or high LTV lending might dry up – Bamford
Halifax and Platform relaunch 85 per cent LTV mortgages
The products will be offered to first-time buyers for purchase, new-build and share equity purposes.
The £999 fee paying product for first-time buyers has a rate of 3.11 per cent while the £1,499 option has been set at 2.9 per cent.
The mortgage with a lower fee has a minimum loan of £25,000 and the other starts from £250,000. Both have maximum loans of £1m.
For new-build, the rate is 3.31 per cent with a minimum loan amount of £25,000 and maximum of £1m. The rate for shared equity mortgages is also 3.31 per cent.
Brokers have been advised to submit applications for existing products by 5pm 21 November.
Platform re-introduces high LTV five-year fixes
Platform has relaunched a series of five-year fixed mortgages to its mainstream new business product as of today.
Two products at 85 per cent have been brought back, one with no fee and the other with a £999 charge.
It has also added a mortgage at 60-80 per cent LTV with a £999 fee and a fee-free offering at 70-80 per cent LTV.
Rates range from 1.66 per cent at the 60 per cent LTV tier and 2.99 per cent for those with a 15 per cent deposit.
These products follow Platform’s relaunch of 90 per cent LTV mortgages earlier this week.
Average house price passes £250,000 for first time ever – Halifax
It is also the first time that house prices in the UK have exceeded a quarter of a million.
The monthly growth was a little more subdued with a 0.3 per cent change since September, down from the 1.5 per cent last month but still in line with the sustained increases in prices since the housing market reopened.
On a quarterly basis, property prices rose by four per cent.
Russell Galley, managing director at Halifax, said: “This level of price inflation is underpinned by unusually high levels of demand, with latest industry figures showing home-buyer mortgage approvals at their highest level since 2007, as transaction levels continue to be supercharged by pent-up demand as a result of the spring/summer lockdown, as well as the chancellor’s waiver on stamp duty for properties up to £500,000.”
Galley added: “While government support measures have undoubtedly helped to delay the expected downturn in the housing market, they will not continue indefinitely and, as we move through autumn and into winter, the macroeconomic landscape in the UK remains highly uncertain.
“Though the renewed lockdown is set to be less restrictive than earlier this year, it bears out that the country’s struggle with Covid-19 is far from over. With a number of clear headwinds facing the housing market, we expect to see greater downward pressure on house prices as we move into 2021.”
Mark Harris, chief executive of SPF Private Clients, echoed Galley’s statements and said although prices had reached a record high, it was clear growth had “slowed considerably”.
“The housing market bounce back was hard and strong when we were able to go out after the first lockdown eased but it has petered out a little and we are seeing more normalised figures,” he added.
Miles Robinson, head of mortgages at Trussle, said: “It’s likely that the heightened demand from buyers, and a race against the clock to meet the stamp holiday deadline was the driving force behind rising property prices last month.”
However, Robinson added it was possible that the market would see a downturn amid a second wave of coronavirus in the UK.
He said: “We’d encourage the government to consider granting the stamp duty holiday to anyone who has exchanged on a property by 31 March 2021. We believe this is the fairest way to support buyers during these unprecedented times.”
Halifax reintroduces two-year remortgage deals and overhauls rates
The relaunched two-year fixes for remortgage applications gives Halifax three fee options at four different loan to value (LTV) levels up to 85 per cent.
Deal are available with, zero, £999 and £1,499 fee options, with the highest fee version available only for loans of at least £250,000.
Rates range from 1.2 per cent at up to 60 per cent LTV with the £1,499 fee to 2.88 per cent at 85 per cent LTV with no fee.
Halifax has also increased rates elsewhere on its three and five-year remortgage products by up to 0.28 per cent, while also making cuts of up to 0.14 per cent.
Product transfer and further advance rates have been cut by up to 0.52 per cent with others increased by up to 0.22 per cent.
Meanwhile BM Solutions, the buy-to-let arm of Lloyds Banking Group, has also increased rates across its two-year and five-year product transfer and further advance range.
The lender did not give details of the level of increases made.
Detached property prices rise as desire for space grows – Halifax
As of September, the typical price of a detached house stood at £477,098 and the average price of a flat was £147,450.
Data from Halifax showed that terraced and semi-detached properties also increased in value, with rises of four per cent to £200,440 and £286,861 respectively.
This surge in value for larger properties has resulted in house prices rising faster for homeowners than first-time buyers.
Homemovers have had to pay an average of £11,615 more to move than they did in March, which represents a four per cent increase over six months.
Meanwhile first-time buyers saw average property prices increase by 2.4 per cent or £4,623 since March.
Overall, property prices in the UK went up by 3.7 per cent in the six months from March to £249,265.
Across the regions
The price of a typical detached house has risen across all regions with the strongest growth in the North West as well as Yorkshire and Humberside. In these regions, increases of six per cent were recorded and in cash terms detached properties were over £20,000 more expensive than in March.
The changes in price were less stark in the South East and Greater London, both rising two per cent. Halifax suggested this was likely due to the stamp duty holiday threshold of £500,000 suppressing huge increases in property value in these areas.
Semi-detached houses in the West Midlands saw the highest change in price as they rose 4.8 per cent, followed by the South West with increases of 4.6 per cent.
The South East saw a small rise in the price of semi-detached houses with a 2.3 per cent change, while Scotland recorded a nominal increase of 0.7 per cent.
The prices of flats tended to fall or rise slowly in the six months from March to September. Flats in the West Midlands declined by 0.1 per cent while in Yorkshire and Humber, they fell by 0.3 per cent. In the South West, the price of a typical flat is 1.6 per cent lower than it was six months ago.
Russell Galley, managing director at Halifax, said: “We’ve seen a fundamental shift in demand from buyers as a result of increased home working and a desire for more space.
“There’s now evidence that it’s this push for larger properties that has been driving the mini-boom witnessed in the housing market since lockdown restrictions were first eased over the summer.”
He added: “This level of price inflation hasn’t deterred would-be buyers though, as in the three months up to September, we received more mortgage applications from both first-time buyers and homemovers than at any time since 2008.
“However, we continue to sound a note of caution on the longer-term prospects for house price inflation, with the full economic impact of the pandemic likely to be felt more keenly over the winter.”
Halifax to accept mortgage prisoner remortgages
The bank will only accept applications up to 75 per cent loan to value (LTV).
To qualify for a Halifax remortgage, borrowers must have a letter from an inactive lender confirming they are a mortgage prisoner and must be on their main residence with no any extra borrowing.
They will only be able to borrow the maximum amount of the first charge mortgage and the new monthly repayments must be no higher than five per cent more of what they already pay.
Halifax will consider interest-only mortgages if there is a repayment plan in place but borrowers in financial difficulty will not be accepted.
Those who have shared ownership or equity mortgages will not be eligible.
Any borrowers added to a remortgage must meet Halifax’s standard criteria as they will not be considered a mortgage prisoner.
Last year, the FCA made changes to affordability assessments for mortgage prisoners who are stuck on high rates with inactive or unregulated lenders.
Lenders can apply these rules to specific borrowers and it is open for those who are up to date with payments, do not want to borrow more and want to stay in the same property.
Mortgage administrators are required to contact mortgage prisoners by 1 December to inform them that they are able to switch and direct them to products which have the modified affordability assessment in place.
A spokesperson for Halifax said: “We are keen to support homeowners classed as ‘mortgage prisoners’ and as part of the FCA scheme, we will be accepting applications from borrowers with other lenders. We encourage borrowers to review options available across the market to ensure they’ve got the right product for their circumstances.”
Industry warns of short-term boom as house prices rise 7.3 per cent – Halifax
On a monthly basis, this was a 1.6 per cent increase on August’s average property price.
This annual growth is the strongest the market has seen since June 2016, but property professionals said the boost could be artificially inflated by government incentives and warned it may not last.
Guy Harrington, CEO of residential lender Glenhawk, said: “The question now is how much longer can the housing market defy the Covid-19 gloom?
“Growing consensus suggests we are in for a nasty shock, unless the doom-mongers have got it very wrong and the economy can ride out an unemployment-led economic slump. As history has shown us, when it comes to the UK housing market, all bets are off.”
Nicky Stevenson, managing director at estate agent group Fine and Country, said the property market was “basking in its own economic microclimate” as people sought larger, more expensive homes.
He added: “There will be a flip side though. When this extra demand for larger homes starts to return to normal, the annual rate of growth overall could sit down as quickly as it stood up.”
Compared to a weaker base
With pent up demand and the stamp duty holiday adding to high business volumes, the market is notably more active than it was this time last year, where prices suffered consecutive declines as doubts toward the general election and Brexit negotiations grew.
Russell Galley, managing director of Halifax, said: “Context is important with the annual comparison, however, as September 2019 saw political uncertainty weigh on the market.”
Homemovers and FTBs driving activity
Appetite appears to be most prominent among homemovers and first-time buyers as Galley said Halifax received more mortgage applications from these groups than any time since 2008.
However, he also suggested this demand would only boost prices for so long before they start to decline.
He added: “The release of pent up demand and indeed the stamp duty holiday can only be temporary fillips and their impact will inevitably start to wane.
“Therefore while it may come later than initially anticipated, we continue to believe that significant downward pressure on house prices should be expected at some point in the months ahead as the realities of an economic recession are felt ever more keenly.”
Halifax and Scottish Widows Bank increase rates
The lender has made rate increases across its two-, three- and five-year product transfer and further advance products – it did not provide details on the level of rate increases.
As part of the rejig, Halifax has also introduced new LTV ranges.
The 75-85 per cent LTV range has been split into 75-80 per cent and 80-85 per cent levels, while the no fee products at 85-95 per cent LTV have been separated into 85-90 per cent and 90-95 per cent.
Scottish Widows Bank has also increased rates on its new business mortgages.
From today selected rate increases have been applied on its two- and five-year 70 per cent LTV and 75 per cent LTV value products for homemovers and first-time buyers.
No further details were given about the scale of the increases.
Accord and Halifax increase high LTV rates
Accord has made 44 rate changes to its residential product suite ranging from a 0.27 per cent decrease up to a 0.42 per cent increase.
Higher LTV deals have seen the most significant rises – 85 per cent LTV rates have been increased by up to 0.42 per cent and 80 per cent LTV deals by up to 0.32 per cent.
The product with the highest increase is the five-year fixed offset remortgage product at 85 per cent LTV which is now 3.28 per cent, it has a £495 completion fee and £250 cashback.
However, the lender has also made significant rate cuts to its longer-term product range with seven-, 10- and 15-year fixes reduced by up to 0.27 per cent.
The 15-year fixed remortgage and purchase product at 75% LTV has been cut by 0.27 per cent and is now 2.49 per cent with a £495 completion fee.
Accord product manager Jemma Anderson (pictured) said: “As part of our regular range review, we withdrew all products on 24th September at 8pm and replaced them at 9am today with end dates extended to February 2021.
“As part of this change, longer term rates of seven-, 10- and 15-years have been reduced by up to 27bps and selected rates increased between 0.01 per cent and 0.42 per cent. We are confident our range remains competitive and our service levels will be maintained.”
Halifax and Scottish Widows Bank
Halifax has also overhauled its remortgage product range to help maintain service levels.
The changes include rate reductions of up to 0.35 per cent and increases of up to 0.37 per cent.
Additionally, the lender announced a rate increase of 0.27 per cent on the two-year £1,499 fee 80 per cent LTV homemover and first-time buyer mortgages.
A Halifax spokesperson said: “We are constantly reviewing our offering and listening to broker feedback as part of our commitment to the intermediary market.
“These changes are designed to help support our customers in the current environment.”
Meanwhile, Scottish Widows Bank is making selected increases on two- and five-year 70 per cent and 75 per cent LTV products.