12 Aug to 16 Aug – Mortgage Strategy

Mortgage Strategy’s Top 10 Stories of the Week:

This week’s top stories include NatWest cutting rates, Santander slashing theirs, and landlords facing a potential CGT hike. Get the full story and analysis here.

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NatWest offers 3.89% loans, Santander reduces rates by up to 27bps 

NatWest cut fixed rates on a range of mortgages, reducing some residential loans to as low as 3.89%, while Santander also lowered rates by up to 27 basis points amid ongoing sector price competition. NatWest’s reductions included a five-year 60% loan-to-value (LTV) purchase fix down to 3.89% with a £1,495 product fee, a two-year 60% LTV remortgage fix reduced to 4.05% with a £3,499 fee, and a two-year 65% LTV green landlord purchase fix decreased to 4.57% with a £995 fee.

Landlords face £11,000 higher CGT bill if rumours true

The average landlord could be £11,000 worse off if the Chancellor increases capital gains tax rates to match income tax rates, according to research by Quilter. Rachel Reeves is reportedly considering this move for her first Budget on October 30 to help address a £22bn “black hole” in public finances. Capital gains tax receipts already reached £14.4bn in 2022-23, according to HM Revenue & Customs, even before any potential rate hike.

Nationwide makes rate cuts to start home loans at 3.83%  

Nationwide reduced rates by up to 20 basis points on its two-, three-, and five-year fixed-rate home loans, with the lowest mortgage rate starting at 3.83%. The new rates, which took effect on 14 August, included reductions of up to 16 basis points for new customers moving home, with fixed rates available up to 95% loan-to-value. For instance, five-year fixes at 60% LTV, with a £1,499 fee, were reduced to 3.83%, down by 16 basis points.

Sedgwick succeeds Rowntree as Paragon mortgages MD  

Paragon Bank appointed Louisa Sedgwick as Managing Director of its mortgages division, effective immediately. She succeeded Richard Rowntree, who left the bank after nearly five years to pursue a new role in the financial services industry. Sedgwick, an industry veteran who joined Paragon in April, previously served as Commercial Director of Mortgages. In that role, she oversaw the restructuring of the bank’s mortgage sales function and product offerings, enhancing its focus on networks and clubs.

Landlords will sell if rent controls introduced: NRLA

A third of private sector landlords would sell their rental properties if rent controls were introduced, according to a poll by the National Residential Landlords Association. The survey, conducted by Pegasus Insight, revealed that 82% of landlords in England and Wales reported strong tenant demand in the second quarter. The highest demand was observed in the South West, followed by the South East, the East of England, and the East Midlands.

Halifax latest big lender to offer rates below 4%

Halifax announced changes to its product range effective from August 9, including rate reductions of up to 0.16% for home movers and first-time buyers. The updated offerings include a five-year fixed-rate mortgage at 3.99% for up to 60% LTV and a two-year fixed-rate mortgage at 4.36% with a £999 fee for up to 60% LTV. Coreco Managing Director Andrew Montlake commented on the ongoing lender price war, noting that recent rate cuts by both new and established lenders, like Halifax, are driving demand and improving prospects for the second half of the year.

Coventry joins sub-4% price war

Coventry for Intermediaries has become the latest lender to offer a mortgage with a rate below 4%, cutting rates by up to 52 basis points. The mutual introduced a five-year fixed-rate mortgage at 3.9% for up to 65% LTV with a £999 fee, and reduced rates on other residential and buy-to-let fixed products. Recently, NatWest, HSBC, Barclays, and Halifax have also launched sub-4% deals, following Nationwide Building Society, the first to do so. Barclays now offers the lowest rate at 3.83% for a five-year fixed at 60% LTV, with an £899 fee for Premier customers or 3.84% for others.

NatWest’s sub-4% direct deal frustrates brokers

UK Mortgage Prisoners Action Group calls on Govt to take ‘urgent action’

The UK Mortgage Prisoners Action Group (UKMP Action Group) has urged the government to take “urgent action” to protect mortgage prisoners and address the surge in repossessions and forced sales. The group has requested an earlier meeting with the UK Treasury, ahead of their scheduled October discussion, citing the mortgage prisoner crisis as “at crisis point.” Data from the Bank of England and Ministry of Justice indicate that in Q1 2024, the value of outstanding mortgage balances with arrears increased by 4.2% compared to the previous quarter.

Landlords to miss green upgrade targets by 18 years: Hamptons  

Landlords will miss green upgrade targets by 18 years if current improvement rates continue, according to research from Hamptons. The property agent predicts that it will take until 2042 for all rented homes to achieve an energy performance certificate rating of A to C, far beyond the 2030 target set by the new Labour government. This year, 39% of energy performance certificate reviews on existing rental homes have resulted in a higher rating, up from 34% a decade ago.