Mortgage Apps on The Rise

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This is Chubby Wallet. We monitor property news across 80+ browser tabs, so you don’t have to!

Here's what we’ve got for you today..

✍ Mortgages are on the rise
✍ Government introduces new bill giving more rights to tenants
 📊 A FLAT MARKET: Values of flats lag behind houses

Let’s dive in!

Mortgages on the Rise

Exciting news from the mortgage market! We've seen some interesting developments lately that we thought you'd want to know about.

The Bank of England just reported a significant uptick in mortgage activity. Gross mortgage advances i.e new home loans given out by banks, jumped by 16.7% from Q1 to Q2 of this year, reaching £60.2 billion.

This marks the first increase since Q3 2023 and represents a 15.5% rise compared to last year.

But that's not all - new mortgage commitments (these are loans banks have promised to give out soon) are also on the rise.

They're up 11.3% from last quarter, totaling £66.9 billion, which is 12.5% higher than a year ago.

But here's where it gets really interesting - house prices are on the move too! Halifax just put out some data showing prices rose 4.3% year-on-year.💪

That's the fastest annual increase we've seen since late 2022. The average house price is now sitting at £292,505 as of August.

Amanda Bryden from Halifax reckons it's been a pretty good summer for the housing market. Apparently, potential buyers are feeling more optimistic with interest rates easing up a bit.

Speaking of rates, the 5-year SONIA swap rates - have dipped to 3.499%, – (SONIA swap rates are like a prediction of future interest rates and banks use these rates to decide how much to charge for fixed-rate mortgages)

Many experts are predicting mortgage rate reductions soon.

Keep an eye out for the Bank of England's next interest rate decision coming up on Sep 19th.

They lowered the base rate to 5% in August, and while markets expect them to hold steady this month, there's anticipation of two more cuts before year-end.

It's certainly an interesting time in the housing and mortgage markets. 😁

Government introduces new bill giving more rights to tenants

The Labour Party's been busy! They've just introduced the Renters' Rights Bill to Parliament. This happened on September 11, 2024 - it's what they call a 'first reading'.

Now, if you're thinking, "Wait, what? didn't we just hear about a renters' bill?" - you're not wrong!

This is Labour's take on the Renters (Reform) Bill that the previous government couldn't quite push through before the election.

So, what's the deal with this new bill? Well, it's got some familiar faces - like getting rid of Section 21 no-fault evictions and making it easier to have pets in rentals.

But Labour's thrown in some new ideas too. Such as…

• Extending Awaab's Law (you know, the one that makes social landlords deal with mould and damp issues within two weeks) to private rentals.

• Plus, they're looking to give tenants more power to shut down bidding wars.

Timothy Douglas from Propertymark had a chat with the Housing Minister and says these reforms are aiming to shake things up big time in England's private rental scene.

Apparently, Labour's been planning to make these changes for a while, and now they're seizing their chance.

But this bill could stir up some interesting situations…

We might see some landlords rushing to serve eviction notices before the ban kicks in. Others might decide to cash out entirely while the bill's still making its way through Parliament.

Also landlords who stick around might get pickier about who they rent to. Combine that with potentially fewer rental properties on the market, and we could see rents climbing even higher. Yikes, right?

So when will the bill become law?

The first reading happened on September 11, so it's got to make its way through both the House of Commons and the House of Lords before it crosses the finish line.

However this Renters' Rights Bill is likely to progress through Parliament faster than you can say "rent control."

Why? It's a key part of Labour's manifesto, and with their hefty majority in Parliament, they're in a strong position to push it through.

In fact, the Housing Minister, Matthew Pennycook, is sounding pretty optimistic.

He's hoping the bill will breeze through the House of Commons, saying they want the new tenancy system up and running "within the first half or around summer next year." 

Talk about moving fast! 😅

So, whether you're a landlord, a renter, or just keeping an eye on the property market, it looks like we're in for some big changes, and they might be coming sooner rather than later.

A Flat Market: Flat vs Houses value growth

Recent data from Zoopla and Hamptons has revealed some fascinating trends that we think you'll want to know about.

Over the past five years, we've seen a notable disparity in value growth between flats and houses across the UK.

In London, for instance, flat values increased by just 2% from 2019 to 2024, while the East of England saw a slightly better, but still modest, growth of 5%.

This pattern of houses outpacing flats in value growth is consistent across all regions.

So, what's behind this trend? Well, it appears that changes in government policies for First Time Buyers (FTBs) who often get on the ladder via a flat, have played a significant role.

The shift to repayment mortgages and stricter affordability calculations has effectively put a cap on what FTBs can afford, particularly impacting the flat market.

The consequences of this trend are quite significant. Flat sales have been running 25%-33% lower than expected over the past three years.

Hamptons estimates that around 400,000 fewer flat owners in England & Wales have moved home compared to scenarios where their property values continued to rise.

Many flat owners are understandably reluctant to sell at a loss, contributing to depressed sales volumes.

The upside of flat values not rising as much as house price growth

For buyers who have held off due to higher mortgage rates over the last 18 months, there are opportunities to buy flats at a much better value than they are expecting.

According to Zoopla, older flats in good condition, especially where the residents are in charge of managing the property, could be a smart place to start your search.

They're also championing more transparency in property listings - think details on service charges and ground rents.

This extra info could be a game-changer in helping you make savvy decisions.

Tycoon Time

This week, we're spotlighting Andreas Panayiotou, a true rags-to-riches story in the UK property world. Born in 1966 to Cypriot parents in London, Panayiotou's journey is anything but conventional.

Leaving school at 14 without qualifications due to his heavy dyslexia (He couldn’t read!)Panayiotou put all his energy into boxing, becoming the Essex under-16 amateur middleweight champion. But it was in property where he truly found his calling.

Starting with a single house conversion in Islington, Panayiotou built an empire that saw him become the UK's largest private landlord in his 40’s.

In a savvy move, he sold his portfolio of about 7,000 properties in 2006-07, just before the great financial crisis.

So, what was his secret sauce? Because he struggled with reading, Panayiotou channeled his energy into developing and training his memory. He became incredibly focused and organized, creating systems that worked around his limitations.

His story really shows us that in property, it’s not just about having a great vision and perfect timing. It’s also about having incredible self-belief and drive. With those qualities, you can truly achieve any goal you set your mind to! 💪🏼

That's it for this week folks. Each week we’ll cover strategies, updates and insights to help you succeed in real estate. We love this stuff!

If you Have questions or just want to chat, We want to hear it.

See you next week in your inbox!

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