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MMPE is introducing a new quarterly news blog for our clients.
Our aim is to update you with relevant housing and mortgage market news. We will aim to share any significant industry changes, covering market conditions, regulatory updates, and useful product information.
In this article, we cover the following areas:
We trust that you will find the blog a useful summary of what is occurring in the U.K. mortgage & housing market. Should you have suggestions for future posts, please email email@example.com
If you have any concerns about your mortgage or losing your home, then this information could be invaluable.
On 23 June 2023, the Chancellor, Jeremy Hunt, met with the U.K.’s principal mortgage lenders and the financial conduct authority (FCA) to agree on support for households struggling with mortgage repayments.
Most U.K. mortgage lenders have agreed to support a new U.K. mortgage charter; the charter is aimed at providing support to residential mortgage customers through their lender. The support measures include:
Consumer Duty is a new regulatory principle that has been introduced as of the 31 July 2023. The aim of consumer duty is to set higher and clearer standards of consumer protection across financial services, and it requires firms to act to deliver good outcomes for customers.
What does the FCA mean by “good outcomes”? Firms are required to provide customers with products and services that meet their needs and offer fair value. As a customer, you should receive communications that can be understood. You should also be offered customer support that you require and when you need it.
The key areas covered by consumer duty are:
The regulator has had a firm commitment to delivering improved customer outcomes for many years, which started with TCF “treating customers fairly”. Where consumer duty strengthens this commitment is that Consumer Duty requires firms to provide evidence that the key areas listed above are consistently reviewed in a firm’s planning, process, and make-up, and the steps taken can be evidenced.
MMPE is fully committed to consumer duty and will work to ensure that we deliver the commitments to our clients. As a business, we have already taken steps to review our processes and procedures and implement new developments which will provide greater support to our clients and ensure that we are offering to review your needs and requirements on a more regular basis.
So, what are the predictions and expectations for the U.K. housing market?
We have seen, over the latter part of 2022 and the first 6-7 months of 2023, 14 consecutive interest rate hikes, taking the present base rate to 5.25%. This has led to a decrease in the number of property sales transactions and, as expected, an increase in mortgage costs.
So, what will the future bring? Property website Zoopla has predicted a 5% drop in prices in 2023. Nationwide’s house price index for July echoed this sentiment, revealing the most significant annual decrease in house prices for 14 years. Halifax also confirmed that they have seen a four-month run of declining house prices.
The consensus is that house prices are on a downward trajectory. Zoopla has also confirmed an 18% dip in demand for U.K. homes over the past couple of months, which reinforces the trend. The overall thoughts are that we will see up to a 5% dip in prices over the course of the year. However, this cannot be guaranteed, and other parties are reporting potentially larger falls.
Higher mortgage rates have undoubtedly made it more expensive to purchase a home. This has led to the house purchase market taking a knock, and prices throughout the country are being affected.
With the cost-of-living crisis challenge, household budgets are also feeling the squeeze, which is undoubtedly affecting the house price landscape. Household budgets have come under pressure, and therefore, fewer people can afford to consider either buying for the first time or moving.
It is not all doom and gloom, though; let’s remember that the housing market has witnessed huge growth since the start of the century, and the average house price has almost trebled. For many first-time buyers, they will see this market as an opportunity to make their first steps and secure a property.
There is some hope, though, of a “relatively soft landing”. Well-regarded sources are now hinting of hopefully a relatively soft descent. The U.K. and Europe tend to follow in the footsteps of the American economy, and across the pond, there are indications of improvement which could lead to a more positive outcome than originally was thought.
As a reminder, MMPE is here to support our clients; if you have concerns regarding your home or your mortgage, please do not hesitate to get in touch; we will be pleased to assist.
MMPE has launched a new and improved mortgage review service, the aim being to provide our clients with securing the most cost-effective mortgage product available as early as possible when reaching a product end date.
Traditionally, remortgage products are only available to apply for within a 6-month window of a product end. Lenders who also offer product transfers will also offer these products at the earliest stage of 6 months.
With 14 consecutive base rate rises and therefore increased mortgage pricing, reviewing your mortgage options as early as possible and securing a new rate has been imperative. However, it is then important to continue to review options up until completion, as on occasions, we have seen better rates products become available.
MMPE have reviewed our processes to ensure that we provide our clients with what we believe is a valuable remortgage review service, “4 Simple Steps”.
“4 Simple Steps” to ensure you get the best mortgage deal when your existing mortgage rate ends.
Get proactive: Speak with MMPE, ideally 12 months prior to your product end date and no later than month 7. Get to know and understand.
Ongoing reviews: With MMPE, we provide you with an ongoing review service that monitors rates and your options. If a more cost-effective or more suitable scheme becomes available. We will work with you to switch to the new deal.
Take some time to consider your personal situation, your future needs, and your requirements. What plans have you with regard to your home for the future, such as:
Note: Product transfers are not always a suitable option as they may not be the best mortgage product on the market for you. To create real value for clients, MMPE take into consideration each client’s individual circumstances, such as the need for additional borrowing, overall costs etc, which may make remortgaging a better option.
As a broker, we compare and analyse the wider financial position and circumstances. We take into consideration all factors, including equity, your loan to value (LTV), your credit history, and your plans for your home/property. Plus, any additional costs and eligibility for products all play a part.
It might suit you to choose a different lender who may offer a better rate, scheme term or additional borrowing.
If you have already accepted a product transfer or remortgaged and would like to benefit from our review service, you can follow the link below; the process takes about a minute to complete and is limited to a couple of simple steps. You need to provide confirmation of your existing mortgage product and when it ends. MMPE will then be in contact at the relevant time to assist.To Review the full article click here.
My Mortgage Experts & Protection Experts Ltd (FCA 937076), is an Appointed Representative of King Mortgages Ltd.
King Mortgages is authorised & regulated by the Financial Conduct Authority (FCA). King Mortgages Ltd is entered on the financial services register http://register.fca.org.uk/ under reference number 803561.
The information contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK.
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Changes in property value, coupled with a potential reduction in your loan amount (with a repayment mortgage), mean a change in the equity available in your property (Loan to Value); hence there could be improved opportunities for a better mortgage for you.
Sussed will track when your mortgage is due to expire (usually when your mortgage payments rise substantially as you will automatically transfer to your lender’s standard rate).
The app will alert you when it’s the right time to discuss your options with your mortgage broker.
Sussed can help you plan.
This feature is ideal for today’s economy and increasing prices. Sussed will continually scan the market, looking for the best-fixed rates available, especially when interest rates are rising.
Using a series of algorithms, our clever technology can identify longer-term fixed rates available today that could save money against predicted rates at the end of your current product term (including the cost of transfer) – sussed is doing all the hard work.
With automatic property value updates and your Mortgage information loaded, this feature calculates the amount of equity and the maximum potential loan that may be available within a landlord’s portfolio. This will assist with seeing if there is the opportunity for to perhaps buy another property from leveraging your portfolio.
Within sussed, you will also be able to see each of your properties with a roadside picture, a confirmed property value, monthly rental, current mortgage balance, payments, interest rate and the Loan to value/Gross rental yield.
Sussed can help you manage your portfolio.
This feature is there waiting for interest rates when they reduce. Using the same technology as Rate Riser, sussed will identify if your current deal is now able to be improved.
Should the interest rates decrease, sussed will compare deals available on the day with your existing deal and flag if there is an opportunity for you to save money by switching.
There are price limits on homes you can buy with an equity loan. The limit is different for each region in England.