The last few weeks has seen the market enter a new phase of volatility with many lenders withdrawing both residential and buy-to-let mortgage products from the market. This trend has continued with hundreds more deals been pulled by banks and building societies since the end of last week.
UK banks and building societies have been pulling swathes of mortgage deals from their books in the wake of a smaller-than-expected drop in the UK inflation rate to 8.7%, which led markets to bet that the Bank of England would raise interest rates well above 5% by the end of the year.
The number of residential mortgage deals available on 22 May – two days before the inflation data was released – stood at 5,385. That had fallen to 4,967 by Thursday last week and was down to 4,686 on Monday.
It’s not all doom and gloom
We are still seeing flexibility in lending, with at least one major high street lender offering to lend up to 5.5 times income to first time buyers and 6.5 times income for those looking for a like for like remortgage.
Another more specialist lender has reviewed it’s affordability criteria, and is now able to offer higher maximum loans (subject to underwriting and criteria) and they’ve also announced the return of 80% Loan to Value mortgage products across their range of standard buy to let, limited company and let to buy ranges.
Take preparatory action
If you or someone you know is considering purchasing or remortgaging, this is a good time to book a call with our award winning brokers. You’ll be able to discuss your objectives and get a better idea of the current criteria you’ll need to meet and how much you might be able to borrow.
Speak to our award winning brokers today on 0208 364 3444 or follow this link to book an appointment: https://mortgagesandinsurers.co.uk/get-a-quote/
19% of all loans taken out by first-time buyers in March were for 35 years or longer
A record 19% of all loans taken out by first-time buyers in March were for terms of 35 years or longer, with more than half taking a loan of more than 30 years, as house-hunters seek to make the soaring cost of loans more affordable.
This is the highest proportion since records began in 2005, the trade body UK Finance is expected to say this week, and more than double the 9% rate in December 2021, when the Bank of England started raising interest rates from a low of 0.1%.
While the move to spread out the period of the loan makes it more affordable on a monthly basis for homeowners trying to cope with the cost of living crisis, over the lifetime of the mortgage they will pay significantly more interest and could be laden with debt into their retirement.
The figures, which form part of a report due to be published by UK Finance this week, come as lenders continue to raise rates and pull deals in the volatile and turbulent mortgage market.
Home movers face longest wait to sell since the pandemic
Houses are taking twice as long to sell today as they did a year ago, as rising mortgage rates make it harder for buyers to afford homes.
On average, it took home sellers 49 days to find a buyer in May, up from 26 days in the same month in 2022, according to analysis of Connells Group data by Hamptons.
Excluding the spring 2020 lockdown period, this marks the longest wait in any May since 2013, when the property market was still recovering from the financial crisis.
Four-bedroom houses were slowest to sell, with owners taking 60 days on average to agree a sale in May this year. This was more than double the 27-day average wait recorded in May 2022.
It comes as another hundreds of residential mortgage deals were withdrawn from the market over the weekend as the average rate on a two-year fixed rate deal jumped to 5.72%, up from 5.33% in less than two weeks.