Digging Deeper – Mortgage Repayments

As mortgage rates rise, attention is inevitably focussed on what impact they will have on borrowers’ mortgage repayment affordability. However, there is a lack of public data on borrowers’ actual repayments and many of the available data sources are constrained by the assumptions contained within. This note provides a quick summary on some of these sources and suggests that repayment affordability is better than some of them show.

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Digging Deeper – The Death of the Buy-to-Let Mortgage

Booms, Busts, and Tax Changes

Not Dead Yet

More Data Please

The buy-to-let (BTL) mortgage was a key feature of the UK’s housing market in the late 1990s and 2000s. But the last few years have been much tougher for BTL investors and their lenders. There are regular reports suggesting large numbers of landlords are ready to sell up thanks to tighter taxation and tougher regulations. If these reports are true, this would suggest the death of the BTL mortgage. However, while the heady days of the 2000s are long gone, the BTL mortgage still plays a key part in today’s housing market. Unfortunately, our understanding of the exact role of the buy-to-let mortgage in the housing market is compromised by a lack of publicly available data.

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Digging Deeper – The Problem With The New-Build Premium

The new-build market has a mortgage problem. Mortgage lenders are less willing to lend at high loan-to-value ratios on new-build homes than existing ones. They have concerns over the pricing of new-build and how well the price of a new home will hold relative to the market over time. Our analysis looks to investigate whether these concerns are appropriate, the role of the Help to Buy equity loan scheme in bridging the gap between lenders’ concerns and market demand, and what might happen to the new-build market when Help to Buy ends.

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Digging Deeper – Unbuilt Planning Permissions

Calculations suggesting there are over one million unbuilt planning permissions are too simplistic and don’t accurately reflect the realities of planning and housebuilding. Regular analysis comparing the number of new planning permissions and housebuilding completions suggests there are over one million homes with permission but unbuilt in England. The latest analysis is by the Local Government Association (LGA) and suggests that “More than 1.1 million homes granted planning permission in England in the last decade are yet to be built”. This is regularly cited as evidence of developer land banking and that the planning system is not a barrier to housebuilding. Unfortunately, the result is probably too high due to poor data and an overly simplistic calculation.

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