A (Christmas) word on the mortgage market

Hello and welcome to the last A word on the mortgage market for 2022. Yet again (it’s becoming a painful habit) it’s been a challenging year. Those of us in the world of mortgages will never forget those few weeks after the disastrous mini-budget when the market more or less imploded. And we are all very much looking forward to a little (only little) break over Christmas to recharge the batteries and prepare to go again next year. Thankfully, next year is looking like it will be better than the last. And there’s more on that to follow.

Before we go (briefly) into that, we just wanted to take the opportunity to wish all of our clients a very Merry Christmas and a Happy New Year. It's been , despite the aforementioned challenges, a pleasure helping you with all your mortgage needs and we very much look forward to doing more of the same next year.

So what does the New Year look like?

Firstly, and most importantly, we think it looks better. let's start with Bank Rate. Just seven weeks ago, many (so called) experts were predicting that Bank Rate would make it to the heady heights of 5.5%. But now, it is more or less universally agreed that Bank Rate won't get above 4% and, indeed, may not even reach that high.

You will no doubt be aware that last Thursday the Bank of England's Monetary Policy Committee voted 6-3 in favour of increasing the Bank Rate to 3.5%. But the good news is that this was completeley expected, by both the markets and UK mortgage lenders so we are not expecting widespread product withdrawals and increases in mortage rates. If we take a little peek (although it's Christmas and peeking is very much frowned upon) at 5-year Swap rates, they are currently at 3.7% and have been slowly falling for a little while now. This is good news.

Secondly, we've been talking to many lenders across the UK and discussing their appetities. Not for turkey and sprouts, but rather how much lending they plan to do next year. The short of the matter is that mortgages are profitable for them, so they really do want to lend. Between us and you, several lenders are already concerned about their peers stealing a march on them, so this means a competitive market is really likely. And that is only good news for borrowers.

Lastly, we think there is a very real possibility of some government stimulus in the housing market in early 2023. Let's be honest, the government has taken a bit of a drubbing recently and they will want to do all they can to try and improve their perception. What that might look like is hard to tell right now, but we think we can expect something, and it may well be the kitchen sink.

The great fixed rate roll off

Before we leave you for the year, it's worth nothing that a staggering 50% of all fixed rate mortgages will expire in the next 18 months. So the chances are, a good many of you will be in this situation.

Whilst no amount of generic advice will do right now, there is one thing we urge you to do. And that's keep in touch with your adviser. They will instinctively know what is right for you and when the right time to make a move is. Remember, many rates can be booked up to six months in advance. So, whatever you do, don't leave it too late. Which reminds us, we really must get that Christmas shopping finished.

So on that note, we will bid you adieu for 2022. in the words of Sir Paul, we wish you a Wonderful Christmastime. See you on the other side.