At the end of each year I ask the Consultants to write a summary of the mortgage market over the past 12 months and predictions for the coming year. This helps to focus the mind on the various debates / discussions they will be having with clients, who always want to know our opinions on rates and on what they are based.
Usually I get 15 very different reviews, particularly about what the future holds, varying from the over optimistic, to the ever pessimistic. This year however, they were like carbon copies.
It was clear from the off in 2013 that the Government wanted to restart the housing market. Assistance came in the form of “Help to Buy 1” (a scheme designed to stimulate the new build market), “Funding for Lending” (a scheme to enable lenders to borrow money for mortgages from the Bank of England at incredibly low rates) and finally “Help to Buy 2” (a scheme to enable applicants to borrow 95% mortgages again).
Lenders responded by reducing their mortgage rates early on, and they started to relax the harsh lending criteria which had been in force since the credit crunch. Although the best rates are still reserved for those with the biggest deposits, anyone with a smaller deposit now stands more of a chance of being accepted for a mortgage.
As the recovery started to gather pace, mortgage lending exceeded all predictions and house prices increased by an estimated 7% year on year. (Reports show an increase of 10% for this area)
I know that sounds like good news, but to avoid any sort of housing boom (and potential bust), “Funding for Lending” has been withdrawn and “Help to Buy” is under constant review.
The Bank of England seems determined to leave the base rate at 0.5% throughout 2014, the Governor Mark Carney has stressed that he will leave interest rates on hold at least until the unemployment rate falls below 7%, something the Bank doesn't expect to happen until at least 2015.
The “Buy to Let” sector grew the most in 2013, with investors taking advantage of strong demand and rising rents. Buy to Let lenders reduced their rates mid-year triggering some long awaited competition in this sector of the market. Some economic forecasters see the future with 25% of property owned by private landlords.
My guess is that unless lenders have left over stocks of “Funding for Lending” money, longer term fixed rates may start to edge up shortly – but it seems likely that rates will stay low for a sustained period. Borrowers have no need to panic, 2014 looks bright!
To speak to a mortgage consultant contact us on 01628 507477.
Recent posts
The Financial Conduct Authority (FCA) has published a discussion paper about the future of the mortgage market in a bid to improve access for first -time buyers, self-employed, and those borrowing in retirement.
Ever wondered where the most reasonably-priced towns for families to buy are? Property company, Zoopla has identified the top 10 towns for families to live in the UK by looking at the most affordable towns, and how many people are looking in that area.
Increase in zero-deposit mortgages in 2024
8 days ago
There was a 32% increase last year in 100% loan-to-value (LTV) mortgages which are mortgages that require zero deposit. According to a recent report by chartered accountants and business advisers, Lubbock Fine, the reason behind this is buyers simply struggling to save enough for a deposit.
Average savings by age in the UK
9 days ago
Many people are quite private when it comes to what is in their bank account. In this short blog, we look into what Brits have saved by age group.
Research from buy-to-let lender, Landbay, shows that UK landlords are looking at raising rents ahead of the Renters' Rights Bill which is due to come into force this year.
Data shows landlords could miss out on green mortgages due to expired energy performance certificates.
Buying a house is a big deal, and where you are planning to buy will make a difference financially. In this short blog, we look at the most affordable and most expensive areas and how much you need to be earning to buy in there.
Pros and Cons of Equity Release
20 May 2025
Equity release is a type of mortgage that allows homeowners 55 and over to access money from their property's equity without having to leave their home. This is done by securing a loan against the house which is usually repaid by selling the property when the borrower passes away or has to move into long-term care.
More information
Trusted by
