Mortgage Market Insights – December 22

“All I want forChristmaaaas, isssssss for rates to come down”

And, not that you would have read this in ANY news report, but it seems my Christmas wish will be fulfilled!

My inbox has been awash with notifications from lenders about rate reductions over the last seven days.

After an average of 6% interest rate offered in October, we are finally starting to see fixed rates begin with a 4 again. This is great news for the housing market AND anyone coming toward the end of a fixed-rate deal.

Hooray!

Christmas Bargains

When is the best time to go and get a bargain? When the product you want is in high demand OR when you are the only buyer?

It puzzles me to hear estate agents reporting that buyers are holding off until January to purchase their new home.

Just like all other products, houses are priced using the basics of economics, supply, and demand. As long as there is demand for a property, the price doesn’t fall.

Nationwide housing index published today, announced the largest decrease in month-on-month house prices in over two years, being 1.4% fall in November following a 0.9% reduction in October taking the average house price to £263,788.

Understandably, prices have fallen recently which is largely due to the interest rate shock we have experienced since the mini-budget.

When I hear of a potential surge in buyer activity in January, it does make me wonder where the logic is in holding off for a time when the competition will be greater.

If I were a first-time buyer right now, I would be out looking for a Christmas bargain!

Covid Mortgages

Eyebrows raised? Please no more Covid news I hear you cry!

We all suffered during Covid, but, it is clear, industries such as leisure, tourism, and hospitality, received an unfair percentage of the pain.

Their income taps were effectively switched off! The Government grants and loans went someway to support these businesses but for some it simply wasn’t enough and they were forced to close.

Of those businesses that were able to see a way through, some are now experiencing further issues when applying for a mortgage.

Most lenders will assess a self-employed borrower’s affordability by averaging a two-year period of declared income. Those that suffered from Covid had such a fall in turnover and profit that their borrowing capability has fallen dramatically.

Enter the - Covid Mortgage - not what it is actually called but should be.

We are grateful to the lenders we work with who help us support these business owners to secure new mortgages and move home by allowing us to ignore the Covid year of accounts. If your business was profitable before the pandemic and has shown recovery since we can disregard the ‘bad’ year helping boost your affordability.

Common sense lending, applauded