Changing Seasons for Mortgages

Changing Seasons for Mortgages

In anticipation of the colder months ahead, we look at how changes in the mortgage market will impact not just the property sector but the wider economy.

As autumnal leaves begin to shed, and people start wrapping up in anticipation of the colder months ahead, we look at how changes in the mortgage market will impact not just the property sector but the wider economy.

Currently, many people across the nation are feeling the effects of the rising cost of living crisis. This is being fuelled by soaring inflation rates, triggered by factors such as political instability across Europe, which has had a knock-on effect on unprecedented fuel and energy prices. In their continued attempts to battle inflation, the Bank of England has repeatedly increased the base rate throughout 2022.

Increasing the base rate has a direct impact on the mortgage market, with lenders increasing their rates on a weekly basis. These frequent changes make it hard for clients to know if they have the most suitable mortgage product. With this in mind, getting the right professional advice empowers clients to make informed decisions, allowing them peace of mind as well as saving both time and money. 

Those situated towards the higher end of the market may enjoy a greater sense of optimism. Whilst not fully impermeable to the impacts of rising costs, these clients are more able to freely navigate the current economic conditions, and proceed with their property plans. This sentiment seems to be echoed by lenders, with a recent example of a major lender more than doubling their maximum lend cap to enable them to better service clients who are looking for above-average borrowing.

With the Government acknowledging long-term action is required to reduce our fossil fuel dependency, the notion of “Green Mortgages” is starting to become more prominent. Whilst not all lenders have yet to fully take up this baton, it wouldn’t be a surprise to see more Government pressure on them in 2023. Lending against more energy efficient homes will not only benefit homeowners, but also assist the UK in achieving its net zero emissions targets. 

Author:

Amit Gupta
Regional Financial Services Manager, Capital Private Finance