Mortgage Strategy Top 10 Stories This Week:
This week’s top stories feature HSBC joining Halifax and Leeds BS in January rate cuts and Land Registry staff vote to strike ahead of stamp duty changes. Explore these developments and more below:
Land Registry staff vote to strike ahead of stamp duty changes
Thousands of Land Registry staff in England and Wales have voted to strike over a mandate to work in the office three days a week, with the PCS union citing concerns over reduced remote working, the use of performance-related data, and added responsibilities without extra pay.
The industrial action, which could coincide with a surge in housebuying ahead of April’s stamp duty changes, has drawn criticism from union leaders who argue the move is arbitrary and demotivating.
The Land Registry insists the changes align with government protocols and says services will continue during any strike, though dates for the action are yet to be confirmed.
HSBC joins Halifax and Leeds BS in January rate cuts
HSBC will cut mortgage rates across a wide range of products, including residential and landlord loans with terms from two to 10 years and loan-to-value ratios up to 95%, starting 6 January. This follows similar rate reductions by Halifax and Leeds Building Society earlier in the week.
The move, aimed at remaining competitive, benefits a diverse range of customers, including first-time buyers, home movers, and buy-to-let investors, and is expected to boost housing market activity as the year begins and ahead of upcoming stamp duty changes.
Vida Homeloans launches 97% LTV 3 & Easy range
Vida Homeloans has introduced the “3 & Easy” range of 97% LTV mortgages, aimed at helping renters, first-time buyers, and those with complex finances, including adverse credit and self-employment, secure a home with just a 3% deposit.
Offering loan terms up to 45 years and five- or seven-year fixed rates, the products enhance affordability and stability. Vida has also increased procuration fees for intermediaries.
Renters’ Rights Bill moves to key report stage
The Renters’ Rights Bill, set for its report stage on 14 January, aims to overhaul the rental market with measures including banning Section 21 no-fault evictions, limiting rent increases to once a year, introducing the Decent Homes Standard, and creating a tenant-focused Ombudsman service. It also strengthens council powers to penalise unscrupulous landlords and allows tenants to request pets.
While broadly supported across parties, the National Residential Landlords Association warns it could exacerbate the housing shortage. After the report stage, the Bill will proceed to its third reading in the Commons before moving to the Lords.
House prices could be further out of FTB reach in 2025
First-time buyer activity rebounded in 2024, driven by improved affordability from falling Bank Base Rates and positive economic factors like real earnings growth and a higher minimum wage. Yorkshire Building Society predicts 330,000 first-time buyer mortgage transactions for the year, up 13.8% from 2023.
However, upcoming stamp duty changes on 1 April, reducing exemptions for homes under £425,000 to £300,000, may trigger a rush in early 2025 and could inflate house prices further, particularly in the South. While base rate cuts boosted confidence, YBS cautions buyers to plan around mortgage rates remaining near 4%.
TSB adds renter and landlord discount mortgage
TSB has introduced a 5&5 concessionary mortgage allowing tenants to buy their rental home with a 5% discount from the landlord and a minimum 5% deposit from the buyer. Designed to assist renters, particularly first-time buyers, struggling to save due to high rents, it complements TSB’s 10% scheme where no deposit is needed for larger discounts.
With 31% of landlords planning to sell within two years, TSB highlights the potential savings for landlords through reduced fees and uninterrupted rental income.
Savills and Knight Frank diverge on 2025 house price growth
Savills forecasts UK house price growth of 4% in 2025, driven by falling mortgage rates and a return to commuter hotspots, while Knight Frank predicts a slower 2.5% growth due to economic challenges and higher borrowing costs.
The market saw 3.3% growth in 2024 as lower mortgage rates and income growth boosted confidence, but upcoming stamp duty changes in April are expected to create a rush among first-time buyers and home movers before raising costs.
Knight Frank warns rising house prices are misaligned with the sluggish economy, with inflation and wage pressures complicating rate-cut expectations.
Coventry Building Society completes £780m Co-op Bank takeover
Coventry Building Society has acquired the Co-operative Bank for £780m, creating a combined group with assets of £89bn, £50.3bn in mortgage balances, and over 4.5 million members and customers.
The Co-operative Bank will remain a subsidiary with its own banking licence, maintaining existing services and FSCS protections. Integration will be gradual, with no immediate changes for customers or brokers.
Coventry CEO Steve Hughes will temporarily lead the bank following the retirement of Co-op Bank CEO Nick Slape, while Jo Kenrick becomes chair. The deal aims to stabilise the Co-op Bank after past financial turmoil.
Mortgage approvals dip in November: BoE
Mortgage approvals for house purchases dipped to 65,700 in November, down 2,400 from October but remaining above the 12-month average of 60,400, according to the Bank of England.
Remortgaging approvals slightly fell to 31,200, while net mortgage borrowing dropped by £1bn to £2.5bn. Despite this, annual mortgage lending growth rose to 1.3%, and gross lending increased to £20.7bn. The effective interest rate on new mortgages declined to 4.5%, the lowest since April 2023.
Experts suggest market fluctuations reflect cautious consumer confidence, with potential rate cuts in the new year expected to stabilise activity.
Halifax updates application for older working borrowers
Halifax has introduced a new customer working age form for mortgage applications where one or more borrowers will be over 70 by the end of the term.
The updated form clarifies that the required date is the one when the customer signs the document. The lender advises brokers to use the latest version of the form to avoid delays in the application process.
