House prices hit a record high
Data from Halifax shows that UK house prices hit a record high in January, climbing 0.7% month-on-month and 3% year-on year to hit an average of £299,138. House prices rose in all areas of the UK compared to last year, with Northern Ireland seeing a 5.9% increase over the past 12 months. Amanda Bryden, head of mortgages at Halifax, noted that the "strong demand for new mortgages and growth in lending" may be driven by first-time buyers trying to complete deals before an increase in stamp duty in April. The reform will mean buyers will start paying stamp duty on property over £125,000, instead of the current threshold of £250,000. While first-time buyers currently pay no stamp duty on homes up to £425,000, this will drop to £300,000 in April.
BBC News
Rate cut boosts borrowers
Following the cut in interest rates from 4.75% to 4.5%, typical borrowers on tracker deals will see their monthly payments decrease by £28.98, according to UK Finance. While many homeowners on fixed-rate deals will not see immediate changes, the cut is expected to encourage lenders to lower mortgage costs, potentially triggering a competitive rate war. However, Simon Gerrard from Martyn Gerrard Estate Agents cautioned that savings from the base rate cut might be offset by upcoming changes to stamp duty. Overall, experts said the outlook remains optimistic for prospective buyers as further rate cuts could enhance affordability and increase buying power.
The Independent
Mortgage rates reduced in boost to homeowners
Fifteen lenders have reduced mortgage rates over the last week, providing optimism for homeowners following a challenging start to the year. The Bank of England's base rate was lowered by 0.25 percentage points to 4.5% on Thursday, marking the lowest level since May 2023. Adrian Anderson from mortgage broker Anderson Harris said he expects more banks and building societies to reduce rates over the coming days. However, David Hollingworth from L&C Mortgages cautioned that many borrowers nearing the end of fixed-rate deals may still face significant repayment increases.
The Times
69% of landlords opt for limited company structure
Paragon Bank’s survey of 789 landlords in the fourth quarter of 2024 found that of those intending to purchase a new rental property in the next 12 months, 69% plan to do so via a limited company. A quarter will purchase in their personal name, with the remainder unsure. The survey, conducted on behalf of the NACFB Patron by Pegasus Insight, found that the proportion intending to purchase through a limited company was the second highest on record, previously only beaten by 74% recorded in the second quarter of 2023. Despite the growth of incorporation over the past decade, the majority of landlords, 78%, still own property in their personal name. Nearly one in 10 (9%) own all properties within a limited company structure, although that rises to 28% where the landlord owns four or more properties. Jason Wilde, head of mortgage sales at Paragon Bank, said: “Over 80% of our customers are now purchasing within a limited company structure. As many of them operate as SMEs, adopting a business structure makes sense and is more tax efficient.”
Paragon Bank, Press Release
Repossessions rise but arrears decline
Data from UK Finance shows that repossessions were up 12% in Q4 compared to Q3, with more than 1,030 residential properties taken over in the last three months of 2024. On a year-by-year basis, repossessions increased by 54% in Q4. buy to let mortgage repossessions were up 30% year-on-year in Q4. The data also shows that there were 92,170 homeowner mortgages in arrears in Q4, marking a 2% fall from Q3. The number of buy-to-let mortgages in arrears also fell, dipping 3% to 12,610. As a proportion of loans, 1.06% of homeowner mortgages and 0.65% of buy-to-let home loans are in arrears.
Charles Roe, director of mortgages at UK Finance, said: “Having peaked in Q1 2023, arrears appear to now be on a confirmed downward trend.” “This reflects the fact that, while pressures remain, the challenges of higher interest rates and cost of living increases have begun to ease,” he added.
City AM
Lender News
Foundation Home Loans introduces Property Plus and HMO Plus
Foundation Home Loans are launching their new Property Plus and HMO Plus products designed to broaden their lending criteria and provide solutions for complex borrowers. Key features of Property Plus and HMO Plus include expanded criteria for selected properties, consideration of properties above all types of commercial premises and a tailored underwriting process. The S2 two- and five-year fixed Property Plus products feature a 2% product fee with rates starting from 6.99% up to 75% LTV. Similarly, the S2 two- and five-year fixed HMO Plus products also come with a 2% product fee, offering rates from 7.09% up to 75% LTV. These new products enable financing options for clients whose properties may have been overlooked by traditional valuation and underwriting processes. Whether it's flats above commercial premises, properties near commercial units, properties in investor-only areas, or postcode concentration, they are now equipped to consider these applications.
Foundation Home Loans, Press Release
Paragon Bank reduces rates by 30bps across BTL range
Paragon Bank has taken 30bps off its range of two-year fixed-rate buy-to-let (BTL) mortgages, with rates starting at 3.34% the lowest level since May 2022. The 3.34% rate is available at up to 70% loan-to-value (LTV) for single self-contained properties with EPC ratings of A-C. These products are subject to interest coverage ratios of 5.50% and a 5% fee. Paragon are also offering two-year fixed rates at up to 75% LTV for the purchase or remortgage of SSCs.
Rates start at 4.34% on Paragon’s green mortgage, rising by 5bps for homes with lower EPC ratings of D or E. A nil fee option is also available with rates starting at 5.84%. Corresponding products are also available for houses in multiple occupation and multi-unit blocks, with rates set at 3.59% on the 5.00% fee product, 4.59% on the 3% fee and 6.09% on the nil fee mortgage. James Harrison, Paragon Bank’s mortgages product manager, said: “It’s great to be able to offer landlords rates that start at 3.34%, our lowest for almost three years.”
Paragon Bank, Press Release
Landbay announces BTL rate reductions of up to 0.30%
Landbay has announced rate reductions across its buy-to-let (BTL) product range, with rates cut by as much as 0.30%. The biggest reductions can be found in the NACFB Patron’s popular small HMO/MUFB range, which has seen reductions of up to 0.30%. Rates now start at 5.04% for a small HMO/MUFB five-year fixed rate product, available at up to 75% LTV. The popular limited-edition range, which includes AVM-supported products, has been reduced by 0.20%. Within the range, standard five-year fixed rate products, available at up to 75% loan-to-value (LTV), now start at 4.69%. Trading company products, designed for those landlords looking to purchase property from within an existing trading company, have also seen reductions of up to 0.20%. Products are available with Landbay’s variable fee structure for increased affordability. Rob Stanton, sales and distribution director at Landbay, said: “With landlords still active in the market and exploring investment opportunities, we want to be supporting our broker partners to help make those purchases happen and ensure they are well positioned to answer any and every demand.”
Landbay, Press Release
Allica Bank rolls out further rate reductions
Allica Bank has announced rate reductions across three key commercial finance products. Rates for its commercial mortgages, healthcare and asset finance products are all being cut, following earlier reductions in 2024. Allica introducers will see these reductions reflected in owner-occupied mortgages with rates lowered by 0.20% on loans under 60% LTV, while semi-commercial investment and owner-occupied mortgages have rates cut by 0.15% on loans under 70% LTV. Experienced care home operators will also see rate reductions of 0.20%. The NACFB Patron continues to offer an additional 0.25% discount for loans exceeding £750,000 or properties with an EPC rating of A-C.
Allica Bank, Press Release
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