Lenders reprice as rate cuts come to ‘abrupt halt’: Broker reaction  

Lenders are beginning to reprice and withdraw mortgage products, signalling that recent rate cuts may have reached an “abrupt halt” due to rising oil prices and economic uncertainty. Key players like Coventry and Co-operative Bank are raising rates or withdrawing offers, following mixed signals from the Bank of England regarding future rate cuts. Additionally, geopolitical tensions and rising swap rates are creating further market volatility, leading to expectations of increased mortgage rates among specialist lenders and smaller building societies.

Chancellor draws up plans to lift CGT to 39%: Report  

Chancellor Rachel Reeves is contemplating raising the capital gains tax (CGT) rate to between 33% and 39% in her upcoming Budget to address a £22 billion public finance shortfall. This increase could apply to second homes and business shares, which are currently taxed at lower rates than income. While Reeves has ruled out raising corporation, income, VAT, and national insurance taxes, CGT remains uncertain. Experts warn that significant hikes might not yield the expected revenue, as individuals may alter their asset management strategies to avoid higher taxes.

LIFT-Financial acquired by Brooks Macdonald for £45m

Brooks Macdonald has acquired advice firm LIFT-Financial, including its subsidiaries LIFT-Mortgages and LIFT-Invest, for £45 million. The deal involves an initial payment of £30 million, with the remainder contingent on meeting financial targets. LIFT-Mortgages founder David Baker expressed pride in the company’s growth, achieving £591 million in lending within a year. He will continue to manage the mortgage business post-acquisition. Brooks Macdonald’s CEO Andrea Montague highlighted the acquisition as a strategic move to enhance their financial planning services, pending regulatory approval expected by March 2025.

Top five Budget tax fears: Hargreaves Lansdown  

Inflation risks around the corner might put kibosh on future rate cuts: BoE

Rob Elder, the Bank of England’s agent for Greater London, cautions that geopolitical events and climate disasters may hinder future interest rate cuts despite a recent decline in inflation. Speaking at the Mortgage Business Expo 2024, he highlighted how such shocks could raise inflation, noting the UK’s vulnerability due to reliance on imports. While the Bank aims for a base rate of 4% by the end of 2025, Elder advised against overly aligning UK policy with US rates, emphasising the importance of the domestic economic context.

Rayner to introduce second reading of Renters’ Rights Bill

Middle East tension and Budget weigh on rate cuts: Savills

Savills reports that rising oil prices from escalating Middle East conflict and upcoming budget considerations will significantly influence interest rates through the end of the year. Brent Crude prices surged 12.7% to $80.93 amid regional tensions. Despite the Bank of England recently cutting rates for the first time in four years, experts anticipate further cuts dependent on inflation remaining close to the 2% target. The upcoming Budget, which aims to address a £22 billion financial shortfall, also poses risks for the housing market, with potential changes affecting landlords and non-domiciled individuals.

Move to end fixed-term tenancies will push up rents: Propertymark

Propertymark warns that the government’s proposal to eliminate fixed-term tenancies in the Renters’ Rights Bill will lead to increased rents. The Bill aims to replace fixed-term agreements with periodic tenancies, allowing tenants to stay until they give two months’ notice. Propertymark argues that fixed-term tenancies provide essential security for both tenants and landlords, particularly for workers with set employment periods. The removal of fixed terms could push landlords toward short-term lets, reducing rental supply and driving up prices for those seeking long-term housing. Propertymark urges the government to retain fixed-term tenancies and conduct an impact assessment on the proposed changes.

FCA to probe consolidation in advice market

The Financial Conduct Authority (FCA) plans to investigate the rising trend of consolidation in the advice market, as indicated in a letter to industry leaders. While acknowledging potential benefits, the FCA emphasised the need for prudent practices to avoid harm. It will review acquisitions, assessing the suitability and financial soundness of transactions and expects firms to seek approval before increasing control over regulated firms. The FCA also highlighted the importance of effective governance, due diligence, and maintaining adequate financial resources throughout the consolidation process.

Barclays cuts rates by up to 0.50%

Barclays is set to reduce rates on select residential purchase and remortgage products by up to 0.50%, effective 11 October. Key reductions include a two-year fixed mortgage at 75% loan-to-value (LTV) dropping from 4.44% to 4.09%, and an 85% LTV remortgage rate decreasing from 5.32% to 4.85%. Amid rising uncertainty due to geopolitical tensions and potential inflation, other lenders, including Coventry and Co-operative Bank, are either raising rates or withdrawing products, highlighting a cautious market environment.