Top headlines of the week: Homeowners fear new property taxes will bring a “huge burden”, and London home construction is in a “crisis”, according to a report by the Home Builders Federation.
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MPC Decision: Industry is disappointed, but not surprised
The Bank of England’s monetary policy committee voted 7-2 to keep interest rates at 4%, and two members pushed for small cuts.
Although inflation began at its peak in 2022, it still exceeded its target, with wage growth and uniform GDP highlighting ongoing economic challenges.
Economists believe further cuts are unlikely this year, although mortgage affordability remains a major issue, especially for first-time home buyers. The housing market has shown resilience, but industry voices believe lower interest rates will increase affordability and confidence. MPC also agreed to reduce its government bond holdings by £70 billion.
Finova launches BTL platform
Finova launches a pre-configured expert purchase volume source solution through its Finova Lending platform, enabling lenders to enter or expand the market within four months without overhauling existing systems.
The modular API native platform supports a variety of borrower and property types, integrates with key services, and has broker portals, case management and smart risk tools.
It aims to simplify the full BTL life cycle, aiming to reduce delays and increase the efficiency of market forecasts, reaching £54 billion by 2029 to 2029.
Homeowners worry about “huge burden” for new property taxes: polls
A Boon Brokers survey shows that UK homeowners are tremendous concerns about replacing stamp duty and council tax with new property.
Almost all respondents were concerned that the proposed 0.5% annual property tax would rise over time, while older and unsecured households were particularly concerned about financial stress.
The schemes considered include a national property tax of more than £500,000 for sales, paid by the seller, and a local annual tax on the Fund Council. Critics warn that such measures could freeze housing liquidity, as many homeowners say there is less chance of buying and selling under reforms.
London housing construction in the “crisis”
A report from the Home Builders Federation said that London’s home construction is in crisis, with completion and planning approval at record lows, with output far below the 88,000 homes required annually.
The bureaucracy, strict planning rules and the blame for lack of buyer support are to worsen affordability and force more Londoners to rent.
The HBF calls for loose plans, updated buyer plans and cancel new developers taxes to restore the market.
Mortgage work cuts for two and five years of restoration
From September 18, mortgage efforts are reducing two- and five-year fixed rates for new and existing customers, up to 0.15% in fixed rates in limited and standard purchases.
Highlights include a two-year fixed limited company with a BTL of 3.87%, five-year fixed at 4.52%, both 75% LTV, and five-year BTL with new customers dropping to 3.76%.
Senior manager Joe Avarne said the move reflects lenders’ commitment to staying competitive with landlords.
The UK’s “flawed” home purchase process is £1.5 billion annually: Santander
Research from Santander UK shows that the outdated housing system in the UK causes at least £1.5 billion in economic losses per year, while deals in England and Wales failed, resulting in £560 million in direct consumer losses and £950 million in wider economic impacts.
Chains, pressure and delay failures prevent people from moving and reduce housing liquidity and market efficiency.
Santander and industry leaders have called for urgent reforms, including greater digitalization and streamlined processes, to cut costs, increase confidence and create housing systems that suit today’s needs.
Prime Minister believes that new property tax is replaced by stamp duty: Report
Prime Minister Rachel Reeves is considering a new national property tax on homes worth more than £500,000, which will be paid by the owners for sale and can replace stamp duty on the main residence, while a separate local property tax may eventually replace the council tax.
The basis of the idea based on the think tank is intended to make the system more equitable and support the financial situation of the council, although the second home will still bear stamp duty.
These changes will affect about one-fifth of real estate sales, while under current rules, will affect 60%, and with stamp duty revenues rising sharply this year.
New seller asking price falls in competitive market: RightMove
Rightmove’s latest home price index shows that average asking prices rose 0.4 per cent (+£1,517) to £370,257, although they are 0.1 per cent lower than the same period last year, the first fall since January.
The decline is driven by London and the South, and despite sales agreeing, homes take longer to increase in supply.
Competitive pricing, stable wages and lower mortgage rates in support activities, but affordable pressures continue to be demanded for stamp duty reforms to increase mobility and help first-time home buyers.
Nottingham BS launches AI platform that can make decisions in “in minutes”
The Nottingham Building Society launched an AI-Driven-powered brokerage platform developed by MQUBE, which provides mortgage decisions in minutes instead of the usual 10-14 days.
The system automatically underwrites, verifys documentation and affordability while requiring only additional information when needed, reducing latency and bottlenecks.
Nearly 500 brokers have signed contracts, and more than a third of the applications were initially approved, the association plans to expand its platform to purchase LET and foreign national mortgages.
“The risk is good,” said the FCA chief economist.
“Risk is good” and is key to financial market growth, highlighting the shift in regulators to allow more innovation while still protecting consumers, said Kate Collyer, chief economist at FCA.
Speaking at Warwick Business School, she noted that measures in retail investment, pension and mortgage markets are examples of “thinking risks” to increase productivity and accessibility.
Collyer emphasizes the use of evidence and surveillance to balance interests and potential harms and to innovate space for companies, including AI and technology.
Changes in mortgage rules, allowing for higher loans, are expected to bring 36,000 additional first-time home buyers to the market while increasing competition and efficiency.
