Top Mortgage Strategy News: Key Updates for This Week
Stay up-to-date with the latest critical mortgage updates for this week. The election casts uncertainty on leasehold and rent reform bills, while experts suggest the BoE should consider cutting rates by up to 0.75% in 2024. Get the insights you need to make informed decisions.
Election throws leasehold and rent reform bills into doubt
The fate of the Leasehold and Freehold Reform Bill and Renters (Reform) Bill is uncertain after Prime Minister Rishi Sunak announced a General Election on July 4. With Parliament dissolving on May 30, it’s unlikely both bills will become law. Glenhawk’s managing director of sales, Jamie Pritchard, expressed frustration, stating it’s disappointing for all involved parties, including landlords, property managers, and tenants seeking improved security and standards.
BoE should cut rates by up to 0.75% in 2024: IMF
The International Monetary Fund recommends the UK cut rates up to three times this year to support the economy’s gradual recovery from a mild recession. Advising a reduction of “about 50-75 basis points” in 2024, the IMF emphasises the need to sustain economic momentum following the country’s recent emergence from a technical recession. Stagnant or reversing the recovery could occur if the Bank of England keeps the rate constant amidst falling inflation and expectations, potentially causing prolonged undershooting of the inflation target, the IMF warns.
Chetwood snaps up CHL Mortgages ahead of ModaMortgages launch
Chetwood Financial, a digital bank, has acquired buy-to-let lender CHL Mortgages for Intermediaries, intending to operate it alongside its forthcoming BTL business, ModaMortgages. Established in 2016, the app-based bank plans to leverage this acquisition to tap into CHL Mortgages’ experienced mortgage lending team, expand its mortgage loan book, and broaden its presence in the mortgage intermediary market. Both ModaMortgages and CHL Mortgages will function as specialist BTL lenders, serving exclusively through intermediaries.
Rate cut ‘possible’ over summer: BoE’s Broadbent
The outgoing deputy governor of the Bank of England suggests the possibility of UK interest rate cuts this summer if inflation continues to decline. Ben Broadbent noted that the direct impact of the pandemic and Russia’s conflict in Ukraine on inflation has diminished. However, he emphasised the importance of assessing whether the lingering effects on domestic prices and wages will persist longer than they took to materialise initially.
In April, the consumer price index fell to 2.3% from 3.2%, according to data from the Office for National Statistics. While this figure is closer to the Bank of England’s 2% inflation target, it remains at the higher end of forecasts. The Bank of England has reiterated its stance on interest rates, emphasising that they will not be reduced until there are evident signs of inflation coming under control. The decline in gas and electricity prices was the primary driver, partially offset by rising motor fuel prices compared to the previous year.
HSBC opens up international landlord loans to UK brokers
HSBC has expanded its international buy-to-let mortgage services to UK brokers, marking the first time it has done so. The coverage spans 14 countries and regions, including Australia, Hong Kong, Singapore, Switzerland, UAE, USA, Guernsey, Isle of Man, and Jersey. Additionally, HSBC has widened the availability of its international BTL mortgages, allowing residents from five more countries — Egypt, Malaysia, Philippines, Qatar, and Taiwan — to invest in the UK property market through BTL and residential mortgages with HSBC UK.
Winners announced at Mortgage Strategy Awards 2024
The mortgage industry came together once again at the JW Marriott Grosvenor House Hotel in London to celebrate the Mortgage Strategy Awards 2024. TV and radio presenter Colin Murray was our host for the evening and didn’t disappoint! The judges had a particularly challenging job choosing who should come out on top this year, with many highly commended firms highlighted; all who made the shortlist should be proud.
Election campaign may lead to slower lending
The property industry hopes that the general election will prioritise calls for more housebuilding and stronger landlord protections in the campaign. However, the sector may experience slower mortgage lending as its first impact. Prime Minister Rishi Sunak announced yesterday that the country will go to the polls on 4 July. John Charcol mortgage technical manager Nicholas Mendes commented, “During the run-up to an election, uncertainty about the future political landscape typically causes financial market fluctuations.”
FCA plans to make UK ‘the best place to do business in the world’
The head of the Financial Conduct Authority stated that they are “working hard to make the UK the best place in the world to do business.” Chief executive Nikhil Rathi added, “We don’t just make the rules, we help shape the ecosystem and long-term risk appetite that firms operate with.” The head of the City regulator outlined the agenda of the watchdog for the remainder of the year and beyond at the annual conference of the Association of Corporate Treasurers yesterday.
Halifax to cut home mover and FTB rates
Halifax has informed brokers that it will be reducing rates on home mover and first-time buyer products by up to 19 basis points on Friday. The reductions will apply to two and five-year fixed rates. John Charcol’s mortgage technical manager, Nicholas Mendes, views this as welcome news amidst today’s dampening mortgage market data. He explains that the inflation data suggests a prolonged hold in the market, indicating that mortgage rates will stay slightly higher for a while longer.
