Scotland on brink of housing crisis

Scotland stands on the precipice of a housing crisis, as Propertymark, the estate agent’s body, warns that the nation is at a pivotal moment. Today, the Scottish government is poised to address the issue by proposing a motion declaring a national housing emergency. Blame for the crisis is attributed to various factors, including a decade of UK government austerity, escalating inflation and living costs, labor shortages stemming from Brexit, and stagnant local housing allowance rates.

Leasehold reforms may open up Govt to £30bn legal challenge  

Leasehold reforms currently under consideration in parliament could create a significant financial burden for the next government if enacted, warns the Residential Freehold Association. The trade body has alerted the Office for Budget Responsibility that proposed measures to cap ground rent and regulate service charges might lead to substantial compensation claims against the government. These changes, it argues, would fundamentally alter millions of long-term standard leasehold contracts relied upon by investors, including pensioners, charities, and other major institutions.

PRA warns smaller lenders to ‘significantly’ tighten stress tests  

The Bank of England has issued letters to numerous heads of smaller lenders, urging them to significantly enhance their tests for economic shocks. Following an 18-month review conducted by the Prudential Regulation Authority, approximately 70 banks and building societies were assessed. The review revealed that several institutions had inadequately prepared for potential shocks that could jeopardise their stability. While these businesses are not named, they are categorised as non-systemic institutions, indicating that their failure would not pose a threat to the overall financial health of the UK.

Base rate cut over summer ‘not unreasonable’: BoE’s Pill   

The Bank of England’s chief economist suggests that it’s reasonable for the central bank to contemplate a base rate cut during the summer. Huw Pill, also a member of the Monetary Policy Committee, acknowledges that a potential interest rate reduction will be considered, particularly as services inflation appears to have peaked, dropping from 6.1% to 6% according to the latest official data. Currently standing at a 16-year high of 5.25%, the base rate reflects the central bank’s efforts to curb inflation from 3.2% to its 2% target.

Resi fixed rate rises gain pace: Moneyfacts

According to Moneyfacts data, mortgage rate hikes have accelerated, with the average two- and five-year fixed rates rising by 0.11% and 0.09% respectively. This marks the most significant month-on-month increase since March 2024. The latest report reveals that the overall average rates for both two- and five-year fixed mortgages climbed between the beginning of April and the beginning of May, reaching 5.91% and 5.48% respectively.

Over a million ‘gamble with retirements’ on ultra-long mortgages: LCP  

Consultancy LCP warns that over the past three years, more than a million individuals have taken out home loans that will extend into their pension years, forcing younger generations “to gamble with their retirements.” Bank of England data obtained through a Freedom of Information request reveals a significant increase in the proportion of mortgages extending past the state pension age, rising from 31% in the final quarter of 2021 to 42% in the last quarter of last year. The consultancy highlights that the fastest-growing demographic opting for these mortgages are individuals under the age of 40, many of whom are first-time buyers.

  Barclays and HSBC make wide-ranging rate cuts

Both Barclays and HSBC reduced rates on a selection of mortgage products. Barclays decreased rates on approximately 20 products across its residential purchase, remortgage, and reward range, with reductions of up to 44 basis points (bps). Significant cuts were applied to its five-year fixed-rate mortgages. For instance, Barclays’ ‘Great Escape’ five-year fix in its remortgage range charged a rate of 4.51%, down from 4.95%, available up to 60% loan-to-value (LTV) with no product fee. Additionally, its five-year remortgage product with a £999 fee was reduced from 4.84% to 4.45%, available up to 75% LTV.

Iress reveals security breach, but client data ‘not compromised’  

Financial services software company Iress has identified a security breach across its network but reassures that client data “has not been compromised.” The Australian firm states it “detected and contained an unauthorised access” of its systems on the third-party storage platform GitHub on Saturday. In a statement released on the Australian stock exchange today, Iress confirms, “There is no evidence that client data has been compromised as a result of this issue. There is also no evidence that Iress’ production or client software has been compromised.”

  Mortgage possession claims increase 28%: MoJ

Ministry of Justice (MoJ) figures for the first quarter of 2024 reveal an increase in both mortgage and landlord possession volumes compared to the same period last year. Mortgage possession actions have sustained a gradual upward trajectory, reaching their highest level since 2019. In comparison to the first quarter of 2023, mortgage possession claims rose by 28%, from 4,035 to 5,182. Additionally, orders increased by 19% from 2,532 to 3,019, warrants by 9% from 2,636 to 2,881, and repossessions by county court bailiffs saw a 4% rise from 729 to 759.

Landlords selling up poses biggest threat to renters: UK Govt

UK Government data revealed that landlords selling properties posed the most significant threat to renters. In the second half of 2023, 45% of households eligible for support from their council to prevent homelessness following the end of a private rented tenancy agreement required assistance because their landlord intended to sell the property. This figure was more than double the proportion of landlords planning to re-let the property. On May 15th, members of the House of Lords deliberated on the primary purpose of the Renters (Reform) Bill.