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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."

The reasons behind the recent reductions have been looked at by Octane Capital, which analysed swap rates over 30 and 60-day periods to predict what could be in store for the market as we approach a possible base rate reduction from the Bank of England on August 1. 

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`

We’ve probably all had enough of people campaigning in recent weeks but I have to admit to one disappointment with the General Election.

There was plenty about housing in the manifestos and the new government certainly has ambitious plans, but no party called for what I consider a straightforward win-win for both consumers and estate agents - that is, the simplification of the house buying process. 

If we’re all about change these days, how about transforming the over-complicated, slow and sometimes heartbreaking way we sell and buy homes?

Many agents, I know, share my impatience with the lack of progress on this, and I appreciate that trade organisations and cross-industry bodies are in talks to get things moving. 

But if you need evidence of how far we still have to go, look at these statistics.

Rightmove says it takes an average of over seven months from when someone puts their home up for sale until they move. Despite the odd element of the process being digitised and apparently modernised, it’s still a desperately long time. 

Because of the absence of information for buyers upfront - again, despite some attempts by some agents and conveyancers - there were 312,770 fall-throughs on the UK residential property market in 2022 (the latest data) according to property analysts TwentyCi.

And a survey of 2,000 home movers by a conveyancing firm found that 72% felt they had suffered stress-related health problems when they last moved -  issues like anxiety, an inability to switch off, sleep deprivation and more frequent arguments with loved ones.

Frankly, it’s not good enough that we treat buyers and sellers this way - and not good enough that agents and other players in the property transaction business go through hell too, especially when the chain breaks and frustration hits everyone involved.

I’m not apportioning blame to any of the many elements involved in buying and selling: it’s the system that’s broken, rather than any player within it. 

But I hope agents will join me in thinking that a new government with a thumping majority might just be the right time to look at this subject anew.

Just before the election was called an all-party group of MPs began an inquiry into improving the home buying and selling process.

Unlike actual legislation going through Parliament, this group’s work was not lost at the calling of the election so the Levelling Up, Housing and Communities Select Committee will meet again in the coming weeks, albeit with new MPs filling the seats.

They themselves cannot change the law but they can at least shine another light on the delays and the anguish caused, not least to the efficient working of the agency, legal and surveying industries who often have abortive work as a result of ‘the system’.

Now on Move iQ there is a host of advice for sellers to prepare their homes and get information ready at an early stage; likewise our guides for buyers emphasise the importance of funding and other upfront considerations when it comes to budgets.

These are invaluable for buyers and sellers operating the current system.

But in the long run we can all do better still. So what do we want instead?

It’s open to debate - and heaven knows we’ve had a lot of that on this issue! - but let’s start with the maximum amount of upfront information for buyers. 

This would reduce the number of abortive viewings - which agents have to do - and would mean that if purchasers get cold feet about a home, it’s much earlier on in the timeline.

Buyers would have to have their own ducks in a row with guaranteed funding in place and other basic information available before they even register with agents.

We should also have much firmer rules on offers and when they are accepted, to slash gazundering and gazumping - if needs be, introducing non-returnable deposits at a key stage of the sales process to lock in purchasers and safeguard sellers from buyer U-turns.

Properly funded - and digitised - search facilities in each council should have minimum   response times whatever the authority; and more use of electronic signatures throughout the process would be a step in the right direction.

And above all, uniformity of approach on digitally converting property data and documents which can be shared with all parties to the transaction, with only commercially confidential information excluded from the sharing process. 
Utopian? Of course - but with Britain getting a political makeover with pledges to get the country moving and competitive again, how long can we seriously accept our present 
system is the best we can manage?

Are you on board?

Housebuilding, leasehold and rental reform are set to be key roles of the new Labour Government’s legislative agenda but agency regulation was missing from yesterday’s King’s Speech.

The State Opening of Parliament saw the King’s Speech set out Prime Minister Keir Starmer’s legislative priorities.

This included a Planning and Infrastructure Bill as well as legislation to fill the gaps on leasehold reform and scrapping Section 21 notices.

The Planning and Infrastructure Bill aims to help Labour fulfil its aim of building 1.5m homes over the next five years by reforming compulsory purchase compensation rules and modernising planning committees, while boosting their capacity.

Brian Berry, chief executive of the Federation of Master Builders  said it is positive that the new Government has already made tackling the UK’s housing crisis a key priority. 

But he added: “One startling omission is the lack of plans to upgrade the existing housing stock. We had been expecting to see a bold plan to retrofit five million homes to make them greener and more energy efficient but clearly the purse strings have not been opened enough to allow for this. While we should be looking to build more homes we mustn’t take our eye of the existing housing stock, which is the oldest and leakiest in Europe.”

Tim Bannister, Rightmove’s property expert, added: “The new Government can now get going with its pledge to improve planning processes so that building homes can take place more quickly. We need more, good quality homes across the UK in the right places, so that everyone can find their next home, whether they are looking to rent, buy for the first time, upsize or downsize."Meanwhile, a Draft Leasehold and Commonhold Reform Bill pledged to end the “feudal leasehold system” by continuing previous changes including regulating ground rents and banning the sale of leasehold flats.

Katie Kendrick founder of the National Leasehold Campaign, described the move as momentous.

She said: “Over the years we have heard many Queens / King’s speeches promising reforms but today’s commitment from the new Government feels different.
“It feels like meaningful change is eventually going to be delivered. 

“It is clear there is a lot of work still to do on the many issues of leasehold but it's refreshing to know that the new government is determined to pick up the outstanding issues, tackle them head on and deliver once and for all.”

However, Sheila Kumar, chief executive of the Council for Licensed Conveyancers, suggested the Government has missed an opportunity to make further improvements to the homebuying and selling process by failing to introduce measures to regulate property agents. 

She said: “Regulation of estate agents and managing agents could be immensely helpful for improving the operation of the property market, making better use of housing stock, supporting growth and providing increased confidence to consumers.”

More rate cuts are being announced by lenders all the time as they vie for business and anticipate the Bank of England base rate fall, which may believe could be as soon as August 1.

Yorkshire Building Society’s second rate cut in a fortnight includes: 

•    For remortgage borrowers and home buyers, a three-year fix at 80% LTV is down from 5.29% to 5.04% with no fee and free standard valuation;
•    For purchase only, a two-year fix at 75% LTV is down from 4.89% to 4.69% with a £1,495 fee and free standard valuation; and
•    For remortgage only, a five-year fix at 75% LTV is down from 4.59% to 4.49% with a £1,495 fee, free valuation and legal fees

Meanwhile Santander is cutting rates including: 

•    Selected resi fixed rates for new borrowers down by as much as 14 bps;
•    Selected resi fixed rates for product transfer by up to 11 bps;
•    Large loan fixes by up to 11 bps and large loan two-year trackers by 15bps; and
•    Buy-to-let rates reduced by between 4 and 13 bps

And Accord is cutting…:

•    Two-year fixed rates and two-year trackers for BTL investors reducing by 10 to 15 bps;
•    Three-year fixed rates reducing by 25 bps; and
•    Five-year fixed rates reducing by 20 to 25 bps.

TSB is launching a three-year fixed for first-time buyers, home movers and remortgage borrowers with a £495 fee and rates starting from 4.75% while also cutting rates on:

•    Five-year fixes for remortgage up to 90% LTV by up to 20 basis points;
•    Two and five-year fixes for first-time buyers and home movers up to 85% LTV by up to 15 bps;
•    Three year fixes for FTBs and home movers by up to 10 bps;

And TSB is making further cuts to selected BTL rates:

•    Some two-year fixes for purchase and remortgage down by 10 bps;
•    Some five-year fixes for purchase and remortgage down by 15 bps;
•    Some two, three and five-year fixes for product transfer down by 10 to 15 bps.

Finally Saffron for Intermediaries is cutting as follows:

•    Large loan five-year fixed rate for owner occupiers at 80% LTV, is dropping by 60 bps from 5.37% to 4.77%, while the £1,495 fee remains unchanged;
•    Two-year fixed for owner occupiers at 80% LTV is being cut by 30 bps from 5.67% to 5.27% with the same £999 fee;
•    A retro-fit two-year fix at 80% LTV is going down by 40 bps from 5.67% to 5.27% also with a £999 fee; 
•    Buy To Let five-year fix at 75% LTV with a £2,500 fee is going down by 20 bps from 5.87% to 5.67%; and
•    BTL two-year tracker at 75% LTV with a £1,995 fee is being reduced by 10 bps from 6.09% to 5.99%.