Financial Update 5th July 2021

Financial Update

Property market continues to boom based on the following:

  • Mortgage borrowing doubled between April and May: BoE – Net mortgage borrowing rebounded to £6.6 billion in May from £3.0 billion in April, but remained below the record £11.4 billion in March, according to the latest Money and Credit statistics from the Bank of England.
  • Annual house price growth accelerates above 13% in June: Nationwide. Regional data for Q2 indicates that all parts of the UK saw an acceleration in annual house price growth. Northern Ireland and Wales saw the largest gains, at 14% and 13.4% respectively in Q2. By contrast Scotland saw the weakest rate of annual growth, at 7.1% closely followed by London at 7.3%.
  • UK lettings market soars as rents strengthen across the board -the latest data released by Goodlord reveals that the lettings market recorded a strong month, with voids continuing to decrease and rents rising across England. The average void period in England is now 16 days, down from 22 days – a decrease of 30%. Goodlord also reported that rents also increased in every region during June, with the North East and the South West both recording increases of over 10% (11% and 10% respectively) and all other English regions seeing a boost. The West Midlands, the only area not to see a decrease in voids, recorded a very marginal rise in rents of 0.05%.

Where are the UK’s up-and-coming property hotspots?

A new study by Boomin, has analyzed over 600 areas across the UK against factors such as house price increases, Google search demand, and even the positivity of the news in each area to find where are the most sought after locations among UK house-hunters.

The Top 20 Most Up-and-Coming Property Locations in the UK

1. Gower, Glamorgan
2. Wigan, Greater Manchester
3. Manchester Central, Greater Manchester
4. Monmouth, Monmouthshire
5. Ogmore-by-Sea, Glamorgan
6. Aberavon, Port Talbot
7. Rochdale, Greater Manchester
8. Leigh, Greater Manchester
9. Stourbridge, Worcestershire
10. Torfaen, Monmouthshire
11. Stretford, Greater Manchester
12. Ludlow, Shropshire
13. Wythenshawe, Cheshire
14. Pudsey, West Yorkshire
15. Ards and North Down, Northern Ireland
16. Oldham, Greater Manchester
17. Burton, East Staffordshire
18. Cleethorpes, Lincolnshire
19. Heywood, Greater Manchester
20. Headingley, North West Leeds

Residential update

  • Chorley Building Society has launched a First Homes mortgage, in support of the new Government scheme.The Society is offering a two-year discount mortgage with an initial rate of 2.39% (a discount of 2.85% from the Society’s SVR) and this is available with up to 95% LTV of the discounted purchase price.
  • Accord and YBS limit 5x LTI cap to higher earners. The lender will only allow LTI of five times for household incomes of £70,000 and above, from Wednesday 7th July, as part of changes designed to support lending at higher incomes. All household incomes below £70,000 will be capped at 4.49 times income.
  • The Nottingham has reduced rates across its residential mortgage range by up to 40bps.The largest reduction is to a fee-free 90% LTV five-year fixed rate, which is down to 3.20% from 3.60%.
  • Loughborough Building Society has added a new mortgage product to its ‘Family Assist’ range. The product is a hybrid of the joint borrower sole proprietor (JBSP) concept and the family-backed Deposit Guarantee. This includes up to 100% lending when guarantees are in place.
  • Newcastle Intermediaries cuts 95% LTV rates. At 95% LTV, a two-year fixed rate has been cut by 25bps to 3.55% and a five-year fix has reduced by 0.10% to 3.79%.
  • Loughborough BS relaunches ‘Buy for Uni’ mortgages as JBSP range. The Buy for Uni product is designed to help students onto the property ladder and avoid student accomodation. Where appropriate, up to two rooms can be rented to help cover the mortgage payments.
  • Virgin cuts rates by up to 0.52% and launches green shared ownership range. The new shared ownership green mortgage products are available up to 85% LTV with two-year fixed rates starting at 2.28% and a five-year fix available at 2.63%, both with a £995 fee.
  • Nationwide cuts residential rates by up to 0.35%. For new customers moving home, a two-year tracker rate at 60% LTV has reduced by 0.25% to 1.39% with a £999 fee, and a two-year fixed rate at 75% LTV has been cut to 1.14% with a £1,499 fee. A five-year fix at 85% LTV has reduced by 0.10% to 2.49% with a £1,499 fee, and a ten-year fix at 60% LTV has been cut by 0.35% to 1.99% with a £999 fee.

Buy-2-Let Updates

  • Paragon Bank has expanded its range of green buy-to-let products with the launch of four further advances exclusively available for properties with an EPC rating of A, B or C
  • Accord Mortgages is reducing rates on its buy-to-let range from Monday 5th July.A two-year fixed rate has been cut from 2.01% to 1.83% at 60% LTV, available for purchase and remortgage with a £495 fee, £250 cashback and free standard valuation.
  • TMW returns to 80% LTV buy-to-let lending for green properties. TMW’s range of 80% LTV products will be available where a property has an EPC rating of C or above. The new rates at 80% LTV include a two-year fixed rate at 2.49% and a five-year fix at 2.99%, both with a 2% fee.

Commercial Update

  • West One raises development finance loan limit to £15m. West One lends up to 65% LTGDV and 85% LTC on its development finance range, available for experienced developers (minimum of two completed projects) across England and Wales.
  • BuildLoan and Nottingham BS launch self and custom build mortgages. Both products are two-year discounted rates based on arrears stage payments available on an interest-only basis during the build. They have a maximum LTV of 80% with land and build costs also up to 80%

Insurance Update

  • Aegon removes Covid-19 underwriting restrictions – Given the success of the UK Covid vaccination programme, Aegon also confirms that it will now consider more applications from higher risk customers, such as those with diabetes, higher BMI and respiratory conditions.For a small number of clinically vulnerable customers, for example people who are on immunosuppressants or high-dose corticosteroids, Aegon is still taking a cautious approach, but can now consider them.
  • Nationwide launches new insurance product for self-employed and zero-hour workers – The insurance, which is underwritten by Legal & General, is available to UK adults aged between 18 and 55 who are employed or self-employed working a minimum of 16 hours per week. Members can choose to insure how much they would need to cover their bills up to 60% of their gross income and up to a maximum of £2,000 per month if they are unable to work. In the event of a claim, the policy would pay out monthly after four-weeks for a maximum of 12 months.For those who are self-employed in a job for less than 12 months, the total will be 35% of gross earnings, up to £24,000 a year. The maximum monthly benefit if someone is unemployed or a houseperson and not in paid employment or working at the time of claiming is £1,000 a month.

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