Subtle Shifts in the UK Property Market

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Another week another update, it’s been a quiet one following the easter break with not too many changes across the market.

House Prices Wobble in Latest Reports from Nationwide and Halifax

This week, both Halifax and Nationwide Building Society released their latest house price indices, providing valuable insights into the UK’s housing market. Here, we delve into the key facts and figures, comparing the monthly change and the year-on-year change.

Halifax House Price Index

According to the Halifax House Price Index, house prices fell for the first time in six months in March. Property values declined by 1% last month when compared to February. The survey found that the average house price dropped to £288,430, around £2,908 less than last month.

On an annual basis, house prices in March 2024 were 0.3% higher than the same month a year earlier. Kim Kinnaird, Director, Halifax Mortgages, said –

“That a monthly fall should occur following five consecutive months of growth is not entirely unexpected particularly in view of the reset the market has been going through since interest rates began to rise sharply in 2022. Despite this house prices have shown surprising resilience in the face of significantly higher borrowing costs.”

Nationwide House Price Index

Nationwide’s house price index showed a similar trend. The average home cost £261,142 as of March 2024, 1.6% more than it did a year ago. However, the average property price has crept down by 0.2% month on month. Robert Gardiner, Nationwide’s Chief Economist, said –

“Activity has picked up from the weak levels prevailing towards the end of 2023 but remains relatively subdued by historic standards. For example, the number of mortgages approved for house purchases in January was around 15% below pre-pandemic levels. This largely reflects the impact of higher interest rates on affordability. While mortgage rates are below the peaks seen in mid-2023, they remain well above the lows prevailing in the wake of the pandemic.”

The data from Halifax and Nationwide’s house price indices reveal a complex picture of the UK’s housing market. While Halifax reports a monthly decrease in house prices, Nationwide reports a slight increase. Yearly, both indices report an increase in house prices, albeit at different rates.

Tandem Bank Takes Us Back to The 90’s

Tandem Bank reminded us about their range of 90% Loan to Value proposition where they offer –

Flats – Offering 90% LTV on flats is particularly unusual, making this a standout feature for potential borrowers.

Flats Above Commercial Properties – Even more rare is the inclusion of flats above commercial properties at a 90% LTV.

Ex-local Authority Properties and Houses are also included.

It’s important to note that the maximum loan size for these 90% LTV mortgages is capped at £500,000. This offer does not extend to new builds, where the LTV ratios are set at 85% for houses and 75% for flats.

Virgin Money Lending Policy

Virgin Money has introduced changes that further support borrowers with diverse income streams –

Income from Second Jobs – Now accepting 100% of income from second jobs, provided it has been consistent for at least 12 months.

Contractors – The requirement for contract renewal documentation has been reduced. Now, evidence is only needed if there’s less than one month remaining on the contract, a significant change from the previous three-month requirement.

New Employees – Borrowers who started a new job in the last six months, Virgin Money has removed the need for a two-year employment history. Verification now requires only a copy of the employment contract and a recent payslip.

Insights From Kent Reliance for the Self-employed

Kent Reliance has highlighted the increasing need for specialist lending solutions, especially for the 4.3 million self-employed individuals in the UK. Specialist lending is becoming more common, with more people in the UK experiencing specialist needs and struggling to find a suitable mortgage solution.

Your home may be repossessed if you do not keep up repayments on your mortgage. You may have to pay an early repayment charge to your existing lender if you remortgage. Not all Buy to Let Mortgages are regulated by The Financial Conduct Authority

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