Day: May 20, 2025

The pace of the Bank of England’s base rate cuts has been “too rapid” given the pressures on inflation, said the central bank’s chief economist. “My starting point is that the pace of Bank Rate reduction should be ‘cautious’, running slower than the 25 basis points per quarter we have implemented since last August,” Huw Pill (pictured) pointed out, who is also a member of the BoE’s rate-setting Monetary Policy Committee. The MPC voted to cut the base rate by a quarter point to 4.25% earlier this month in a three-way split that saw Swati Dhingra and Alan Taylor press for a larger half-point reduction, while Catherine L Mann and Huw Pill urged hold. The move was the committee’s fourth rate reduction since August. Rate-setters began reducing the base rate “slightly too early” last year, and now the economy’s “disinflationary momentum has shown signs of stuttering,” said Pill at a conference hosted by Barclays in London this morning. Inflation is set to jump to around 3.5% from 2.6%, as a range of index-linked bills and taxes take effect, when official cost-of-living data is released on Wednesday. The rise is expected to come from a range of factors spanning higher energy, water and  council tax bills, to uplifts in National Living Wage and employer National Insurance Contributions. Pill said: “I am concerned about the potential inflationary impact of structural changes in price and wage setting behaviour, following the experience of prolonged, well above-target inflation in recent years.” He added: “As long as disinflation back to target is not complete, maintenance of some restriction will still be required. “On my reading, that is a view that is held across a broad swathe of MPC members.” The Bank’s May forecast lifted its outlook for the UK economy to grow by 1% this year, marking an upgrade from the 0.75% growth predicted in its February report. Money markets expect between two and three further cuts this year to boost a subdued economy that faces tariff uncertainties. However, many economists predict that the Monetary Policy Committee may pause rate reductions at its next 19 June meeting to gauge how hot prices are running across the economy. The post Rate cut pace ‘too rapid’: BoE Pill appeared first on Mortgage Strategy.

Gable Mortgages has launched two 0% deposit five-year deals for first or next-time buyers wishing to purchase a home. The mortgage product is aimed at ‘Generation Rent’ customers who can manage their rent but find it hard to save for a deposit to buy a home. The lender has two products available. These include a standard five-year fixed that has a rate of 5.95% and a new build five-year fixed with a rate of 5.65% Both have a minimum loan of £125,000 and a maximum loan of £1m. Meanwhile, the maximum loan-to-income rate for standard customers is 4.49 times income but rises up to 5 times for key workers, 5.5 times for joint key workers and 4.5 times for self-employed. This follows April Mortgages’ announcement last week on the launch of a long-term 100% LTV home loan. April’s No Deposit Mortgage is available at up to 4.49 times income on 10- and 15-year fixed terms. It comes with no early repayment charges for moving and redeeming or redeeming from the borrower’s own funds. With two lenders launching 100% LTV products within a week of each other, John Charcol mortgage technical manager Nicholas Mendes says: “It shows lenders are starting to respond to the challenges faced by aspiring homeowners who are mortgage-ready in every way except for the deposit.” “Zero deposit mortgages can play an important role for renters who have strong, stable incomes and good credit histories, but have been unable to save due to the high cost of living.” “The fact that Gable’s deal is linked specifically to new-build homes also supports government efforts to encourage take-up in that sector and stimulate supply.” “One of the key strengths of this deal is the five-year fixed rate, which gives buyers certainty over their monthly repayments at a time when interest rate movements remain uncertain.” “That stability is hugely valuable for households trying to budget long term. Unlike the 100 per cent mortgages of the past, which were often seen as risky and too widely accessible, today’s versions are far more targeted and subject to robust affordability checks, which helps mitigate some of the risk.” “That said, there are still important considerations. Starting with no equity means buyers are more vulnerable to house price movements and may need to stay in the property for longer in order to build up enough equity to remortgage or move.” “With both Gable and April now entering this space, there is every chance that other lenders will follow. Increased competition could lead to better pricing, more innovation and a wider range of options for first-time buyers.” “The demand is clearly there, and as lenders compete more aggressively at the entry level of the market, it is likely we will see more low or no deposit offerings appear in the months ahead.” The post Gable Mortgages launches 0% deposit five-year deals appeared first on Mortgage Strategy.

Gen H has introduced higher loan-to-value (LTV) lending on new build properties.  The lender says the criteria update can be combined with its other boost products including its income booster, which increases how much a customer may be able to borrow.  Gen H chief commercial officer Pete Dockar says: “New build lending has always been a bit of a paradox. We need new build homes to ease the housing crisis, but lenders tend to apply extra scrutiny and limits to this type of lending, which means comparatively fewer aspiring homeowners can actually access the lending they need to buy one.” “Making it easier for new build buyers to get the mortgage they need stimulates demand which in turn creates more supply – this will have a positive impact on the entire housing market. Most critically, it will get keys in the hands of real people.” Last week, Gen H announced the promotion of Graham McClelland to chief executive officer, succeeding co-founder Will Rice.  Rice will remain on the board of directors as a non-executive director to support Gen H. The post Gen H launches 90% LTV lending for new builds appeared first on Mortgage Strategy.

West One has consolidated its residential mortgages, landlord and second charge units under Marie Grundy, who has been appointed managing director, mortgages. The business says, Grundy, who joined the firm in 2017, “has been instrumental to the successful delivery and growth of the firm’s second charge and residential propositions, and now takes charge of buy-to-let as well”. Phill Tyson will take up the role of head of mortgage operations, overseeing the underwriting for the new division. The lender adds that its head of intermediary sales & distribution, Paul Huxter, and his sales team will lead the sales of BTL in addition to residential mortgages, focusing on club and network partners. Its packaging partners will receive dedicated support from the firm’s BTL mortgages specialist distribution team, led by Pauline Rylands. The business will offer dedicated sales support for its short-term lending unit, including bridging and development finance, led by Guy Murray and Tom Cantor. Andrew Ferguson had previously been managing director of BTL at West One. Grundy says: “The consolidation of the products under the new mortgage division will mean a more joined-up approach to distribution, and ultimately better service for brokers. “With all the mortgage products now under one roof, I look forward to working with our broker partners to develop deeper connections and provide seamless access to the full range of products we can offer.” Enra Specialist Finance owns the West One and Arla Finance brands. Enra Specialist Finance chief executive Danny Waters adds: “By consolidating our Mortgage products into one division, we put ourselves in the best possible position to be easy to deal with and to provide a joined-up, efficient service. “Marie has been with us for eight years, and in that time has been a tremendous ambassador for the firm and has delivered continued success. “I can think of no one better qualified to spearhead this next phase of our growth.” The post West One consolidates mortgage unit under Grundy appeared first on Mortgage Strategy.

Homes England started and completed more properties and unlocked more land for home development this year compared to the previous 12 months. The agency, which works with local and national organisations to boost housing, revealed its provisional 2024/2025 figures, which are set by the government. It says last year it: Backed the completion of more than 36,000 homes, up 14% from 2023/24 Was behind the start of construction for an additional 38,000 homes, up 6% on 2023/24 Unlocked land that is capable of delivering 79,000 further homes, up 32% on 2023/24 The projects the agency has recently agreed, include a land purchase for 4,200 homes in April that creates the agency’s largest development site in the North of England. The body has bought 34 hectares for its South East Warrington Urban Extension, for an undisclosed sum, which brings the amount of land it owns in the area to around 250 hectares. Homes England was also behind a £96.7m deal in March to develop a five-acre residential site near Leeds city centre. The Kirkstall Road site will house 618 one-, two- and three-bedroom apartments set across five buildings in landscaped grounds, including a new public space next to the River Aire. Housing minister Matthew Pennycook (picture) says: “Homes England is playing a crucial role in supporting the government’s plan for change to build 1.5 million new homes and deliver the biggest increase in social and affordable housebuilding in a generation. “Last year, I set out ambitious priorities for Homes England, and I am pleased that the Agency has exceeded key housebuilding targets to ramp up the delivery of new homes and place-based regeneration.” In November, Home England chair Peter Freeman and chief executive Peter Denton resigned after Pennycook wrote to the body setting out new annual targets. New Homes England chair Pat Ritchie says: “As the newly appointed chair of Homes England, I’m proud to see the hard work of the agency reflected in our 2024/25 performance figures. “Looking forward, the transformation of the Agency into a more regionally-based model will mean we’re well-placed to support the government’s mission to build 1.5 million homes this parliament.” In January, Eamonn Boylan was appointed as the new chief executive of Homes England. The post Homes England boosts housebuilding projects appeared first on Mortgage Strategy.