Kensal Rise & Queens Park, 69 Chamberlayne Road, London, NW10 3ND
Kensal Rise & Queens Park, 69 Chamberlayne Road, London, NW10 3ND
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The Government has confirmed plans to ban no-fault evictions and in-contract rent increases as it prepares to present the Renters’ Rights Bill to Parliament today.

The Bill will abolish Section 21 ‘no-fault’ evictions for new and existing tenancies and will also end blanket bans for those on benefits or with children.  

An announcement this morning from the Ministry of Housing, Communities and Local Government said the Bill will extend Awaab’s Law into the private rented sector, letting tenants challenge dangerous conditions and it will also apply the Decent Home Standard for rentals. 

The update confirmed rumours of a ban on rental bidding wars.

Landlords and letting agents will be legally required to publish an asking rent for their property. They will also be banned from asking for, encouraging, or accepting any bids above this price

The announcement said a new Private Rented Sector Database will also be created to help landlords understand their obligations for compliance and provide tenants the information they need to make informed choices for new tenancies. It will also enable councils to focus enforcement where it is needed most.  

Earlier this week, the Housing Minister Matthew Pennycook met with landlord and tenant groups and committed to engaging with them as the Bill progresses, to ensure the sector is ready for the changes.  

Housing Secretary Angela Rayner said:  “Renters have been let down for too long and too many are stuck in disgraceful conditions, powerless to act because of the threat of a retaliatory eviction hanging over them.  

“Most landlords act in a responsible way but a small number of unscrupulous ones are tarnishing the reputation of the whole sector by making the most of the housing crisis and forcing tenants into bidding wars.   

“There can be no more dither and delay. We must overhaul renting and rebalance the relationship between tenant and landlord. This Bill will do just that and tenants can be reassured this Government will protect them.”

A prominent rental market analyst is warning that elements of the reform legislation proposed by Labour “are casting dark shadows” over the lettings sector, with few landlords likely to sleep easy at possible threats to their investments. Doug Shephard, director of the Home website - a listings platform that also conducts respected monthly market analyses for the lettings and sales sectors - says the new government’s upcoming Renters Rights Bill may prove to be final straw for many landlords.

He cites the possibility of Metro Mayors - all but one of which are Labour - acting as guinea pigs for the introduction of some forms of rent controls, as well as the provisions of the Bill itself, covering restrictions on evictions, stronger redress rights for tenants and encouraging more pets in rental properties. Shepherd writes in the latest monthly report: “Activists’ calls for rent controls and an end to contractual tenure are casting dark shadows over the future of both the sales and rental markets. Too many landlords are already selling up, fearful that either they won’t be able to set the rent required to cover their costs or they’ll be forced to join expensive licensing schemes or both.” He fears this will add to the long term crisis in the lettings sector - a continuing excess of demand over supply. He points out that across Britain in August 2019, 96,000 properties were available for rent: this month, August 2024, the figure is just 66,000, representing a drop of 31%. As a consequence, rents have risen progressively but Home believes the current rate of rental growth across the country as a whole is being dragged down by the particularly sluggish performance of London.

The website says the annualised national growth figure for asking rents is just 1.1%. While Wales continues to lead the regional growth table, followed by the South West, with rises of 14.5% and 11.7% respectively year-on-year. Yorkshire and the North East continue also show double-digit annualised growth. Meanwhile, the year-on-year decline in Greater London rents is now -1.2%. In the capital the boroughs of Bexley and Haringey indicate the worst declines in asking rents with annualised rental falls of 16.6% and 9.4% respectively.

The East and West Midlands also show falls (-2.8% and -0.8% respectively). On the sales side of the market, asking prices rose by 0.2% during the last month across England and Wales - the seventh consecutive monthly rise - and are now up 1.2% compared to August 2023. Prices increased again in Wales, Scotland and all English regions except the North West and South East where they remain unchanged. The unsold sales stock count for England and Wales rose again over the last month to reach a 10-year high for August. Nearly 6,000 properties were added to agents’ portfolios, taking the current total of unsold stock to 494,837.

Mortgage rates may be dropping but buyers need to act fast as product shelf-life is also falling.

Moneyfacts data shows the average shelf-life of a mortgage deal fell to 17 days this month, down from 30 days in June.

It comes as the average two- and five-year fixed mortgage rates have fallen, halting five months of consecutive rises and giving a boost to homebuyers.

Average mortgage rates on the overall two- and five-year fixed rate deals fell month-on-month by 0.18% and 0.15% respectively, halting five consecutive months of rises. These rates are now at their lowest level since March 2024.

The overall average two- and five-year fixed rates fell between the start of July and the start of August, to 5.77% and 5.38% respectively, Moneyfacts said.

Rachel Springall, finance expert at Moneyfacts, said: “Borrowers will be pleased to see that fixed mortgage rates fell month-on-month, halting five consecutive months of rises.
“Lenders re-priced their deals with vigour during July due to falling swap rates, and the volatility within the mortgage market was made clear by the notable drop in the average shelf-life of a mortgage to just 17 days, down from 30 in June.

“There are expectations for rates to fall further in the weeks to come, particularly as the market reflects on the 0.25% base rate cut, the first cut in over four years.

“A variety of lenders priced their lowest rate deals even lower still over the past few weeks, leading to the return of sub-4% fixed rates towards the end of July, but borrowers must look beyond the initial rate and assess any mortgage based on the overall true cost.”

Investors will be delighted that there have been so many mortgage rate drops announced by major lenders last week - Nationwide actually taking a five year fix to under 4% and the likes of Barclays And TSB announcing major cuts too.

Mortgage experts say this could be just the start of things to come, whatever happens at Thursday’s meeting of the Bank of England’s monetary policy committee. They spoke to news agency Newspage to produce this summary:

Andrew Montlake, managing director at Coreco: "It’s life by a thousand cuts for the mortgage market. Rarely a day goes by without a number of lenders shaving their rates further. Nationwide going sub-4% was a symbolic moment and more lenders are likely to follow suit. Lenders seem to be pricing in the fact that a base rate cut is coming very soon."

Hannah Bashford, director at Model Financial Solutions: "Rate reductions are seriously picking up pace with multiple lenders adjusting their offerings on a daily basis. It’s only a matter of time before we see more products under that all-important 4%. More mortgages going sub-4% has the potential to supercharge demand during the rest of 2024."

Rohit Kohli, director at The Mortgage Stop: "These reductions will always be welcome news, but we need lenders to do more at higher loan-to-value levels to help first-time buyers. Lenders are focusing on those with higher equity and are still being cautious when it comes to borrowers with smaller deposits. First-time buyers need to be front of mind to get the property market moving."

Justin Moy, managing director at EHF Mortgages: "These rate cuts are the ideal tonic for borrowers, and will only give confidence to the economy as a whole. With more rates moving towards that magic sub-4%, borrowers will not only benefit financially, but it will encourage the property market to grow and improve, giving everyone that important psychological lift. Sentiment in the mortgage and property market is everything."

Dariusz Karpowicz, director at Albion Financial Advice: "Another positive news from major lenders with yet another series of rate decreases! The mood and feel of the mortgage market are improving every day. Will the Bank of England follow suit and decrease the base rate during the next vote? It is now looking very likely and much anticipated. Let's hope these cuts continue to bring some much-needed relief to borrowers and keep the momentum going in the right direction."

Ranald Mitchell, director at Charwin Mortgages: "The mortgage market is turning up the heat, and it’s fantastic news for everyone. With nearly daily price cuts, this trend is set to revive a market that has spent a few years in the cold. The once sluggish landscape is now full of potential and excitement. With prices dropping, homeownership and costs of funds are becoming more attainable. Whether you're a first-time buyer or looking to upgrade, the current market conditions are ripe for picking. Don't miss out – it's time for action."

Mortgage market swap rates reflect the price lenders have to pay financial institutions when securing fixed rate funds, which they use to offset short-term risks associated with fixed rate mortgages.

They are generally based on government bonds - Gilts - which reflect what the market anticipates will happen to interest rates down the line.
 
In sum, the cost of swap rates filter through to mortgage rates, whether they rise or fall, and currently they’re falling.
 
With the UK economy finally showing signs of improvement and with inflation at its target rate of 2.0% it’s expected by some analysts that the base rate will drop from 5.25% to 5.0% on Thursday.

The mortgage sector is already responding in anticipation, with swap rates showing early signs of decline.
 
The analysis by Octane Capital shows that, over the past 30 days, swap rates have declined at an average daily rate of -0.22%. In contrast, the 30 days prior saw swap rates increase at an average daily rate of 0.06%.
 
The trend also holds true when analysed over a longer period of time. Over the last 60 days, swap rates have fallen by an average of -0.08% daily, compared to an average daily increase of 0.13% over the previous 60 days.

Octane chief executive Jonathan Samuels says: “There’s a high chance that we could see a cut to interest rates come August, a year on from them hitting their recent peak of 5.25%. We’re already seeing swap rates start to reduce in anticipation of a potential base rate cut and we expect this trend to continue as the next Bank of England decision approaches.
 
“This will be welcome news for mortgage holders who have seen the cost of their repayments climb considerably in recent times, and so too for prospective buyers who have had to reevaluate their position in the market due to increased borrowing costs.”swe`36`

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