The UK’s mortgage market is facing uncertainty as the Leasehold and Freehold Reform Bill and Renters (Reform) Bill are in doubt following the announcement of a General Election on 4 July. The future of these bills is uncertain, with Parliament set to dissolve on 30 May.
The Leasehold and Freehold Reform Bill, which aims to provide more security for tenants while ensuring landlords can regain possession of their properties when necessary, is now at risk of not being passed into law. The bill has been through the first and second reading in the House of Lords and was due to go to the committee stage next, but its future is now uncertain.
The Renters (Reform) Bill, which proposes important changes like abolishing Section 21 ’no-fault’ evictions, ending fixed-term tenancies, and introducing mandatory ombudsman and landlord portal schemes, is also at risk. The bill has been through the first and second reading in the House of Lords and was due to go to the committee stage next, but its future is now uncertain.
Glenhawk managing director of sales Jamie Pritchard says it is “incredibly frustrating for everyone involved – from landlords and property managers to tenants who are hoping for better security and standards.” He adds that the industry needs clarity, and this uncertainty makes long-term planning and investment very challenging, which is essential for a healthy rental market.
Leasehold Reform
The Residential Freehold Association has expressed concerns about the Leasehold and Freehold Reform Bill, calling it “a defective and poorly evidenced piece of legislation which has ignored the outcomes of consultation with industry and leaseholders alike.”
Mortgage Rates
In other news, mortgage rates have risen this week, with the average rate on a two-year fixed deal standing at 5.89%, higher than the previous 5.69%, while rates for a five-year deal came in at 5.39%, also higher than last week’s 5.24%, according to figures from Uswitch.
This follows the Bank of England’s decision to leave UK interest rates on hold at their current 16-year high of 5.25% for a sixth consecutive time. About 1.6 million existing borrowers have relatively cheap fixed-rate deals expiring this year.
Mortgage Strategy
Santander UK has reduced selected fixed residential mortgage rates by up to 0.27% and buy-to-let rates by up to 0.20%. Examples of five-year fixed rates that have been reduced include a 60% LTV five-year fixed rate residential remortgage with a £999 product fee, now priced at 4.42%, a reduction of 0.08%.
Santander UK
As the UK’s mortgage market navigates these uncertain times, one thing is clear: the need for clarity and stability is more pressing than ever. With the General Election looming, it remains to be seen how the mortgage market will be affected in the coming months.
General Election
