Catch up on Mortgage Strategy’s most popular stories this week. Market Watch: Bombarded and nearly broken and Gove housing budget handback is bad news for FTBs. Read more below:

Market Watch: Bombarded and nearly broken

Andrew Montlake writes about the recent barrage of rate changes in the mortgage market. He says that lenders are engaged in a “long game of leapfrog” as they try to offer the lowest rates possible. This has led to a lot of confusion and anxiety among borrowers, who are bombarded with news of rate changes and “average” rates that do not represent the actual market. The author also criticizes the Bank of England for raising rates too quickly and without a clear plan. He argues that this is causing unnecessary pain for borrowers and could lead to a recession.

Gove housing budget handback is bad news for FTBs

The Department for Levelling Up is returning £1.9 billion to the Treasury, which was originally allocated to address England’s housing crisis. According to a recent report in The Guardian, Michael Gove’s department has encountered difficulties in identifying suitable projects to utilize the funds. The surrendered amount includes £255 million initially designated for the development of affordable housing in 2022-23.

Labour mortgage summit – industry reaction

The Labour Party has scheduled an emergency mortgage summit this week, where they will engage with mortgage brokers. The summit will be supervised by Rachel Reeves, the shadow chancellor, and Lisa Nandy, the shadow housing secretary. Robert Sinclair, the Chief Executive of the Association of Mortgage Intermediaries (AMI), will participate in the summit.

Lenders cut loan sizes by almost 20%: MBT

Mortgage Broker Tools has reported a significant reduction in the loan size offered by mortgage lenders, indicating a decrease in mortgage availability in recent months. According to the platform’s data, the average minimum loan size for borrowers has declined from £141,224 (over eight months until September) to £114,776 (over eight months until May). This represents a substantial 19% decrease in the average loan size provided by certain lenders.

Major lenders insist no UK arrears crisis

Today, the Treasury Committee convened a session where UK bank and building society executives appeared to discuss the current state of the mortgage market. The hearing focused on several key topics, including the challenges faced by borrowers due to mortgage stress, strategies to address repayment delinquencies, and the overall impact on the housing market in the UK.

Lloyds tops lending poll for resi and BTL mortgages: UK Finance

According to data from UK Finance, Lloyds Banking Group has surpassed Nationwide to become the leading provider of buy-to-let loans in the annual ranking. Additionally, Lloyds has maintained its first-place position for residential loans. In 2022, the gross residential mortgage lending by Lloyds amounted to £52.7 billion, reflecting a 4.4% decline compared to the previous year. Despite a 1.3% decrease in market share over the same period, Lloyds still holds a share of 16.8%, which is slightly lower than the previous year.

Landlords feel pinch as BTL arrears rise 42%

Specialist property lending experts, Octane Capital, have conducted research indicating that landlords are experiencing the impact of consecutive interest rate hikes. The data reveals a concerning trend in the buy-to-let sector, where instances of arrears are increasing at a much faster pace compared to homeowners.

Fleet launches five-year 70% LTV fixes

Fleet Mortgages, a buy-to-let specialist, has introduced five-year fixed-rate mortgages, which are now accessible across its three primary product categories: standard, limited company, and HMO/multi-unit block. For standard and limited company borrowers, the five-year fixed-rates are set at 5.69%, while for HMO and multi-unit block borrowers, the rate is slightly higher at 5.89%. It’s worth noting that all these fixed-rate options come with a 5% fee attached to them.

Calls for govt action as landlords face steep rise in BTL repayments

Calls for urgent government action to support landlords in the private sector have emerged following the latest Bank of England predictions. The projections indicate that buy-to-let mortgage repayments will surge by an average of £275 per month by the end of 2025. The National Residential Landlords Association warns that failure to address this issue may worsen supply problems and potentially result in substantial rent hikes.

Imla and Ami publish lender funding Q&A guide

Imla and Ami, two prominent mortgage industry associations, have collaborated to release an informative online guide aimed at mortgage professionals. The guide, titled ‘Understanding Lender Funding, Product Pricing, and Availability,’ addresses the impact of recent and continuing interest rate fluctuations. It elucidates the various forms of funding utilized by mortgage lenders and elucidates how the composition and distribution of funding sources influence their capacity to adapt to changes in interest rates.

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