Mortgage rates have been steadily increasing and volatility amongst lenders worsening with many lenders withdrawing products on a daily basis, reflecting the recent decision by the Bank of England to raise interest rates to a 15-year high of 5%.
A prime example of this is Kensington Mortgages who released rates on Thursday morning only to advise on Thursday afternoon that they were withdrawing the same rates at 5pm this Monday.
This continued upward trend in rates has resulted in increased costs for homeowners and property investors alike who are needing to find additional funds to cover rising interest rate costs.
As of Tuesday, the average rate for a five-year fixed mortgage stood at 6.01%, with the average two-year fixed deal at 6.47%. While these rates may seem high, it’s important to note that they reached similar levels in November last year after a sharp rise following the mini-budget announcement by then-Chancellor Kwasi Kwarteng.
We spoke about the Government’s reaction to mortgage rates last week, and we are delighted to report that many lenders have begun to act in support of the Chancellor’s new Mortgage Charter, with lenders like Nationwide announcing improvements to their rate switch window.
Nationwide have confirmed that from Saturday 1 July if our client already has a mortgage with Nationwide, we’ll be able to request a rate switch within 6 months of their product expiring. Further details can be obtained by contacting our senior broker Danny O’Keeffe on 0208 364 3444.
More Positive Lending Changes
In more positive news, we are pleased to announce that lenders are starting to loosen and relax some of their lending criteria.
Skipton building society have made changes to their criteria around applicants without indefinite leave to remain.
Under their new policy, applicants without a settled or pre-settled status can now borrow up to 90% Loan-to-Value (LTV) if they have at least 12 months residency in the UK and a minimum of 2 years left on their VISA or if at least one of the applicants is a UK citizen (or has indefinite leave to remain) then there would be no restriction on the application
Specialist lender Vida has also recently announced positive changes to their criteria, offering increased opportunities for borrowers with unique circumstances.
Noteworthy enhancements include accepting child benefit income up to 100%, considering back-to-back remortgages within six months, providing boosted support for non-standard property types, and accepting self-employed income up to 18 months old with relevant bank statements.
Additionally, contractors working under the Construction Industry Scheme can now provide payslips as evidence of income.
For mortgage help and advice please feel free to contact our award winning team on 0208 364 3444.
Bank bosses told to explain low savings rates
Bank bosses have been summoned by the UK’s financial watchdog over concerns interest rates on savings are too low.
Higher interest rates have led banks to put up mortgage costs sharply, but savings rates are not rising as fast.
Chancellor Jeremy Hunt says it is an “issue which needs solving”, at a time when many households are struggling with the soaring cost of living.
The heads of Lloyds, HSBC, NatWest and Barclays banks will meet the Financial Conduct Authority (FCA) on Thursday.
The City watchdog will press the banks on their savings rates and on how they communicate with customers, according to the Financial Times, which first reported the meeting.
Landlords spurred on to buy more property by tenant demand
More than four out of 10 buy-to-let landlords (41%) plan to buy more property in the next 12 months, a survey from Buy to Let Lender Landbay has revealed.
Paul Brett, Landbay’s managing director, intermediaries said: “Once again high tenant demand serves as a key driver for landlords to consider expanding their property portfolio. And while house prices have remained more robust than some landlords previously predicted, high rental yields are clearly still tempting some to explore the sales market.
“Rather than the buy-to-let market languishing and lots of landlords exiting as some commentators have suggested, this data shows landlords are still seizing the opportunities available.