Market Update

Welcome to the Mortgage Advice Bureau Market Update

Welcome...

Welcome to August’s Market Update, providing an insightful look into the UK’s mortgage landscape. 

The biggest news this month is a Bank of England interest rate cut. With this in mind, some of the rates below may change in the coming weeks. 

If you have any specific questions, please reach out whenever you need. 

We also look forward to the impact of Labour’s Election win on the housing market.

Scroll on…

Dashboard Overview as of 1/8/24

Base Rate
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Number of 95% Lenders
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Number of Own New lenders
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Lowest Rate on the Market
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Average New Build Loan Amount
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Average LTV
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Shared Ownership Summary

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Average SO Loan Amount
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Average LTV
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No of SO Lenders at 95%
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Lowest SO Fixed Rate
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Homes For Scotland: Time To Make a Difference

Homes for Scotland (HFS) is the representative body for home builders. 

Its wide-ranging membership together delivers the majority of the country’s new homes of all tenures, spanning smaller developers, Registered Social Landlords, larger home building companies, PLCs and associated businesses in the supply chain. 

This means that no other organisation comes close to understanding the challenges impacting the supply of new housing.

Here, its Chief Executive Jane Wood highlights the challenging environment home builders in Scotland must operate within and the levers the Scottish Government can pull now to make an immediate difference.

 

The decisive general election outcome offers new opportunities and refreshed political choices. 

As such, it has been very encouraging to see the new UK government placing a major emphasis on housing delivery and the planning system within 72 hours of it coming into power, and the subsequent legislation being proposed in the King’s Speech.  But, with these devolved matters north of the border, what, if anything, does this mean for the 693,000 Scottish households that have been identified by independent research as being in some form of housing need?

With the Scottish Government acknowledging a national housing emergency in May, housing starts and completions in ongoing decline and an alarming contraction in SME home builder activity, surely it must be obvious to all that we need to start doing things differently?  At the time of writing, however, there are unfortunately no signs of this.

Underscoring both the importance and urgency of a new approach, recent figures from HFS members show that c5000 new high-quality, energy-efficient homes have been stalled because of cuts to the Affordable Housing Supply Programme.  Builder insights also identify planning and the wider consenting process as having the biggest detrimental impact on their ability to deliver homes..

Will the Scottish Government recalibrate to tackle these challenges that are firmly in its grasp?

Will it bravely acknowledge that the root causes lie in underinvestment of our planning regime and a regulatory environment that fails to recognise the unintended consequences of policies created with poor understanding of the costs and impacts on both consumers and those organisations that build the much-needed homes of all tenures that we require? 

Scotland’s population deserves better than the same old tired responses blaming Brexit, cost price inflation and Westminster.  These are, of course, significant issues but nowhere near as pressing as the risk and uncertainty of trying to navigate a planning system which takes over 62 weeks to process a major housing application or trying to determine long-term investment and construction programming against such a constrained financial backdrop – and these are factors adversely affecting both private for sale and affordable housing given the strong interdependencies across sectors.

With another 18 months before the Scottish 2026 elections, there IS time for impactful change but this requires strong political leadership, direction at pace and a joined-up approach across government at all levels. Last month, we, along with colleagues at the Scottish Federation of Housing Associations, Chartered Institute of Housing, Association of Local Authority Chief Housing Officers, Joseph Rowntree Foundation and Shelter Scotland wrote to the First and Deputy First Ministers calling for an urgent meeting and setting out priorities areas to be addressed in an Action Plan. 

Declaring a housing emergency is meaningless if it only results in more of the same. We know what has to be done and it is frustratingly simple: build more homes and create the policy environment that facilitates it.

Rates - August 2024

Below we have listed the top five rates available across a range of LTVs. Please let us know if you need any additional information.

95% 90% 85% 80%
5.55% - Halifax
5.75% - Halifax
5.81% - Halifax
5.89% - Bath
6.95% - Santander
5.22% - Virgin
5.24% - Virgin
5.33% - Furness
5.33% - Cumberland
5.35% - Halifax
4.88% - Cumberland
4.89% - Natwest
4.93% - Barclays
4.93% - Coventry
4.94% - Virgin
4.85% - Leeds
4.87% - Natwest
4.87% - Clydesdale
4.88% - Cumberland
4.88% - Coventry
75% 70% 65% 60%
4.64% - Barclays
4.65% - Barclays
4.66% - Santander
4.68% - Cumberland
4.69% - TSB
4.64% - Barclays
4.65% - Barclays
4.66% - Natwest
4.68% - HSBC
4.69% - Barclays
4.58% - Coventry
4.64% - Barclays
4.65% - Barclays
4.66% - Santander
4.68% - Cumberland
4.39% - Barclays
4.42% - Barclays
4.46% - Halifax
4.51% - Santander
4.54% - TSB
95% 90% 85% 80%
5.19% - Bath
5.23% - Halifax
5.34% - Halifax
5.41% - Santander
5.43% - Halifax
4.75% - Barclays
4.76% - Virgin
4.85% - Barclays
4.85% - Clydesdale
4.88% - Cumberland
4.50% - Coventry
4.53% - Cumberland
4.53% - HSBC
4.54% - Halifax
4.54% - Virgin
4.44% - Virgin
4.45% - Coventry
4.51% - HSBC
4.53% - Cumberland
4.54% - HSBC
75% 70% 65% 60%
4.23% - Leeds
4.33% - Cumberland
4.33% - Natwest
4.34% - Barclays
4.34% - TSB
4.23% - Barclays
4.33% - Cumberland
4.33% - Natwest
4.34% - Barclays
4.34% - TSB
4.17% - Coventry
4.23% - Barclays
4.28% - Coventry
4.29% - Virgin
4.33% - Cumberland
4.03% - Barclays
4.04% - Barclays
4.06% - Halifax
4.11% - HSBC
4.13% - HSBC

Own New

Rate Reducer

Rate Reducer from Own New is designed to make it more cost effective to buy a new build home by helping homebuyers access mortgage rates that are lower than traditional ones.  

This scheme is open to first-time buyers and those planning to move home. The tables below provides current rates available on this scheme. 

Halifax - Own New Exclusive 2-Year Fixed Rates with £999 Product Fee

60% 75% 80% 85% 90%
RATE
2.44%
3.13%
3.46%
3.58%
4.07%

Halifax – Own New Exclusive 2-Year Fixed Rates with no Product Fee

60% 75% 80% 85% 90%
RATE
2.70%
3.39%
3.73%
3.84%
4.33%

Virgin – Own New Fixed Rates Reducer Everyday Purchase Range – 5% Incentive with £995 Product Fee

Term 60% 75% 85% 90%
2-Year Fixed
0.84%
1.63%
2.13%
2.56%
5-Year Fixed
2.70%
3.12%
3.42%
3.70%

Virgin – Own New Fixed Rates Reducer Everyday Purchase Range – 3% Incentive with £995 Product Fee

Term 60% 75% 85% 90%
2-Year Fixed
2.42%
2.89%
3.26%
3.64%
5-Year Fixed
3.34%
3.63%
3.87%
4.13%

Furness – Own New 2-Year Fixed Rate. 3% Incentive

80% 90% 95%
RATE
3.29% - £999 Product Fee
3.77% - £999 Product Fee
4.67% - No Product Fee

Furness – Own New 2-Year Fixed Rate. 5% Incentive

80% 90% 95%
RATE
2.01% - £999 Product Fee
2.65% - £999 Product Fee
3.61% - No Product Fee

Products with a £1999 fee

75% 80% 85% 90%
25-30 Years
5.37%
5.53%
5.55%
5.79%
30-35 years
5.42%
5.59%
5.61%
5.86%
35-40 years
5.43%
5.60%
5.62%
5.87%

Products with no fee

75% 80% 85% 90%
25-30 Years
5.50%
5.66%
5.68%
5.92%
30-35 years
5.55%
5.72%
5.74%
5.99%
35-40 years
5.56%
5.73%
5.75%
6.00%

How Does a Rate Cut Impact Mortgages?

Understanding how changes to the Bank of England’s base rate affect mortgages can be a bit complex. While the official base rate plays a role, it is not the sole factor determining the cost of your mortgage. Lenders primarily secure their funds for fixed-rate mortgages from the money markets, where the cost of borrowing is influenced by expected base rate trends, among other factors.

Most homebuyers opt for fixed-rate mortgages, typically set for 2 or 5 years. Over the past three years, the uncertainty surrounding the base rate has caused mortgage rates to fluctuate between 4% and 6% for a typical 5-year fixed-rate mortgage at 75% loan-to-value (LTV). These variations are largely driven by financial markets and their projections for future borrowing costs.

At the beginning of 2024, there was widespread anticipation of several base rate cuts throughout the latter half of the year. However, these expectations have been moderated, leading to an increase in average mortgage rates, which have recently climbed back above 4.5% for 5-year fixed-rate loans.

Today’s base rate cut could potentially bring mortgage rates down to levels seen earlier in the year. Nevertheless, the future of mortgage rates will largely depend on market perceptions of base rate movements heading into 2025.

What's New From Own New?

Own New Update

Own New is four months old! Here are some of the highlights, as well some exciting additions we can look forward to…

  • Four Lenders in Place
  • 131 Builders Onboarded
  • 308 LoAs Agreed
  • Driving Leads When Promoted On Site
 
New Tool Kit Coming Soon…
 
Shortly, the team at Own New are launching a web-based tool, that will help us all easily process Own New mortgages.
 
The toolkit will make recommending Rate Reducer  simple and easy in the following ways:
 
  • Generate Rate Reducer Illustrations at the push of a button
  • Enhanced Analysis – helping us understand how incentives are used to create lower deposit
  • Improved Customer Understanding

 

As always, if you have any questions regarding ‘Rate Reducer’, please let us know.

News
Articles

Why Brokers Are Valuable for First Time Buyers

Research from Coventry Building Society suggests that 96% of first-time buyers (FTBs) who have used a broker believe they were important in the homebuying process. 

Link opens a third party website

House Prices See Fastest Growth Since 2022

UK house prices increased by 0.3% m-o-m in July, resulting in a pickup in the annual rate of house price growth from 1.5% in June, to 2.1% in July – the fastest pace since Dec 2022, according to Nationwide.

Link opens a third party website

Highlights of the Month

What now for the Housing Market?

Now the dust has settled, what now for the housing market under the new Government?
 
The Labour party announced plans to overhaul the planning system in order to speed up building processes for their target of 1.5 million homes.
 
More homes for more people is a sentiment we can all support and if affordability improves alongside this goal, then all the better for it.
 
 
 

Review: Jordan Moffat

My partner and I used MAB, we were amazed with the service, start to finish.

As first time buyers, Josh & Jordan made us feel at ease & communicated so well with both of us.

We now own a brand new house and have MAB to thank for that. Thoroughly recommend!

– R Duffy

Record 5* Reviews for New Build Team!

July saw us receive the highest number of five star reviews for our new build team. In total we recevied 16 glowing reviews from happy customers across the country!

We work hard to gather feedback from our customers ….so a huge thanks to all our partners and homebuyers who continue to support us in delivering a fantastic customer experience. 

Well Done Josh!

Big congratulations to Josh Blackley – Employee of the Month!

An efficient member of the team who constantly maintains a high standard within our New Build department, Josh provides brilliant customer service to his clients and always leaves no stone unturned to ensure a smooth and stress-free mortgage journey.

Contact Us

For more information please contact our team

David Balfour

Business Development Manager

Grant McKenna

New Business Team Manager

Jack Wilson

Head of New Build

Small Print

The information pertained in here is not intended for public consumption, it has been prepared for the partners and friends of Mortgage Advice Bureau. Please do not share with consumers or buyers. Thank you.

Your home may be repossessed if you do not keep up repayments on your mortgage.

In some instances, there may be a fee for mortgage advice. We will not charge a fee to those purchasing a new build home who contact us via the details provided. Other branches of Mortgage Advice Bureau may charge a fee. The actual amount you pay to them will depend on your circumstances. The fee is up to 1%
but a typical fee is 0.3% of the amount borrowed.

Images courtesy of WayHomeStudio