This week's Top 10 Stories in Mortgage Strategies
This week's must-read articles feature lenders' reactions to rate cuts and Hargreaves Lansdown's biggest budget tax concerns. 
Please see below for details.
Lenders reprice as interest rate cuts come to an 'abrupt halt': Brokers react
Lenders have begun to reprice or withdraw mortgage products, suggesting that recent interest rate cuts may have come to an “abrupt halt” due to rising oil prices and economic uncertainty. Major companies such as Coventry Bank and Co-operative Bank have raised rates or withdrawn proposals following mixed signals from the Bank of England about future rate cuts. Additionally, geopolitical tensions and rising swap rates will further increase market volatility, with higher mortgage rates expected among specialist lenders and smaller building societies.
Prime Minister sets out plans to raise CGT to 39%: report
Chancellor of the Exchequer Rachel Reeves is considering raising the capital gains tax (CGT) rate from 33% to 39% in her next budget in a bid to tackle a £22bn funding shortfall. The increase could also apply to second homes and business stocks, which are currently taxed at lower rates than income. Mr Reeves has ruled out increases in corporation tax, income tax, value added tax and national insurance tax, but CGT remains uncertain. Experts have warned that large tax increases may not bring in the expected income, as individuals may change their wealth management strategies to avoid higher taxes.
LIFT-Financial acquired by Brooks McDonald for £45m
Brooks McDonald has acquired advice firm LIFT-Financial, which includes subsidiaries LIFT-Mortgages and LIFT-Invest, for £45m. The deal includes an initial payment of £30 million, with the remainder contingent on achieving financial targets. LIFT-Mortgages founder David Baker expressed pride in the company's growth, which has seen it achieve £591m of loan volume within a year. He will continue to manage the mortgage business following the acquisition. Brooks McDonald CEO Andrea Montagu said the acquisition is a strategic move to strengthen its financial planning services and is expected to receive regulatory approval by March 2025. He emphasized.
Top 5 Budget Tax Concerns: Hargreaves Lansdowne
Inflation risks looming, potentially raising concerns about future interest rate cuts – Bank of England
Rob Elder, from the Bank of England's Greater London agency, warned that despite recent declines in inflation, geopolitical events and climate change could prevent future interest rate cuts. Speaking at the 2024 Mortgage Business Expo, he highlighted the UK's vulnerability to import dependence and how such shocks could push up inflation. The World Bank aims to reach a benchmark interest rate of 4% by the end of 2025, but Elder emphasized the importance of domestic economic conditions and advised against aligning UK policy too closely with US interest rates.
Rayner to introduce second reading of Tenants' Rights Bill
Saville says Middle East tensions and budget will weigh on rate cut
Savills reports that rising oil prices due to the escalating conflict in the Middle East and upcoming budget reviews will have a significant impact on interest rates until the end of the year. Brent crude oil prices rose 12.7% to $80.93 on the back of regional tensions. The Bank of England recently cut interest rates for the first time in four years, but experts expect further cuts depending on whether inflation remains near its 2% target. The upcoming Budget, which aims to tackle a £22 billion funding shortfall, also poses risks to the housing market, with changes that could impact landlords and unaddressed individuals.
Rent rises due to move towards abolishing fixed-term rental contracts: Property Mark
Propertymark has warned that the government's proposals to abolish fixed-term tenancies in the Tenants' Rights Bill will lead to higher rents. The bill aims to replace fixed-term tenancies with periodic tenancies, allowing tenants to stay up to two months' notice. Propertymark argues that fixed-term tenancies provide essential security for both tenants and landlords, especially workers whose employment is fixed-term. The removal of fixed terms could push landlords towards short-term rentals, reducing rental supply and increasing prices for people seeking long-term housing. Propertymark is calling on the government to maintain the fixed-term lease and carry out an impact assessment of the proposed changes.
FCA explores advice market consolidation
The Financial Conduct Authority (FCA) will investigate the growing trend of consolidation in the advice market, as set out in a letter to industry leaders. While acknowledging the potential benefits, the FCA stressed the need to act cautiously to avoid harm. It reviews acquisitions, assesses the suitability and financial soundness of deals, and expects companies to seek approval before tightening controls over regulated companies. The FCA also highlighted the importance of effective governance, due diligence and maintaining adequate financial resources throughout the integration process.
Barclays cuts interest rates by up to 0.50%
Barclays will reduce interest rates on some home purchase and remortgage products by up to 0.50% from October 11. Key reductions include 75% loan-to-value (LTV) two-year fixed mortgage rates falling from 4.44% to 4.09%, and 85% LTV remortgage rates dropping from 5.32% to 4.85%. It includes doing. Market conditions remain cautious, with other financial institutions, including Coventry Bank and Co-operative Bank, raising interest rates or withdrawing products amid heightened uncertainty due to geopolitical tensions and the possibility of inflation. It highlights that.
