The UK mortgage market is experiencing significant changes this week, highlighted by Santander’s decision to reduce rates across its mortgage offerings. This move is important for borrowers and investors alike, as it reflects the current competitive market and evolving borrower needs.
TL;DR: Santander is reducing mortgage rates for many products starting 18 June; this impacts both new and existing borrowers, while the Renters Rights Act has led to nearly 20,000 evictions as landlords adjust to new regulations.
What changes is Santander making to its mortgage rates?
Starting from 18 June, Santander will implement reductions in rates across most of its mortgage range. This includes cuts to fixed and tracker products for both new and existing residential and buy-to-let customers. Notably, while many products will see rate decreases, some first-time buyer offerings at 85% loan-to-value (LTV) will experience increases. The lender is also introducing new home mover products, lowering product fees, and reintroducing selected first-time buyer products. Additionally, Santander is extending key application and completion deadlines by one month, which may provide more flexibility for borrowers.
How are house prices reacting in the current market?
According to Rightmove, average asking prices for newly listed homes have fallen by 0.6% in June, reaching £376,191. This marks the largest decline for June in 14 years, indicating that sellers are adjusting their expectations amid strong competition and a more price-conscious buyer base. This trend could signal a shift in the market dynamics, potentially impacting future mortgage lending and property valuations.
What impact is the Renters Rights Act having on the rental market?
The recent implementation of the Renters Rights Act has resulted in a notable increase in evictions, with research from COHO indicating that nearly 20,000 tenants were evicted in the month leading up to the Act’s enforcement. Approximately one in four tenants received notice before the ban on Section 21 “no-fault” evictions took effect. This acceleration in evictions suggests that landlords are becoming more cautious in managing risks such as rent arrears and anti-social behaviour, as they adjust to the new legal market.
What does this mean for landlords and tenants?
For landlords, the changes brought about by the Renters Rights Act necessitate a reevaluation of tenant management strategies. With the ban on no-fault evictions, landlords may need to adopt more proactive approaches to mitigate risks associated with tenant behaviour and payment issues. For tenants, while the new regulations may provide greater security in their tenancies, the increase in rent hikes reported by Hamptons suggests that those who do experience rent increases could face more significant financial pressure. In May, the number of rent increases decreased by 23% year-on-year, but those that did occur saw average annual increases of 5.4%.
Frequently asked questions
What should first-time buyers expect from the current mortgage market?
First-time buyers may find opportunities in the current mortgage market as lenders like Santander are reintroducing products and reducing fees. However, they should be aware that some high LTV products may see rate increases, which could affect affordability.
How can landlords adapt to the new Renters Rights Act?
Landlords should consider reviewing their tenant management practices and potentially investing in technology or services that help address tenant issues proactively, as the new regulations limit their ability to evict tenants without cause.