It would be difficult for even the most positive amongst us to try to say there have not been challenging headwinds blowing up for our industry and those looking to buy new property or remortgage with a mortgage right now.
This year started in the doldrums from the fallout from the now infamous September 2022 Mini Budget. The surprise for many would be that real mortgage rates now are actually not much higher than were available then, even after many more Bank of England rate rises and including the most recent 0.5% rise which came into force on Thursday 22st June.
For example, looking back to mid-January 2023, a 5 year fixed mortgage with 30% deposit was available at just under 4.5%. Today, a similar product might cost around 0.8% more (or on a £250,000 Mortgage over 25 years, would be circa £125 a month).
Mortgage rates available now are actually lower than those that were available at the end of last year.
You won’t see this in the papers though…
The UK media seem to have an agenda with average mortgage rates which incorporate much higher interest rates which most people (and in particular most clients of John D Wood & Co.) will not be forced to use. This is because they include all loan to value products, from those with no deposit, all the way to products that have a 40 or 50% deposit which are usually much cheaper. More specialist products will also be part of the sample used which also often have a higher pay rate. These average prices for 5 year fixed rates are now being quoted at above 6%. So far higher than may be available.
Yes, costs have increased and they may increase a little more before they come back down again, but with food inflation now coming down and key commodities also now in a downward trend, it is likely inflation will come down faster soon. This in turn will have a positive impact the Bond market, interest rate SWAPS and then mortgage fixed rates.
Being able to decipher the news and information that applies to you is not always easy, and it’s important to note that media outlets do not always have an interest in making things clearer which often leads to scaremongering and sensationalism.
This is where having an expert broker is invaluable. We can crack the codes and explain in plain English ‘if and how’ changes in rates apply to you, and how they are likely to influence the market right now, and with real evidence and experience to back this up.
In the current market, we tend to find more serious and motivated buyers and sellers. Those who need to move for practical reasons such as growing family, marriage, school catchment areas, jobs, relocations or retirements.
If you are in need of straight talking, tailored advice relevant to your specific circumstances, please contact us at Capital Private Finance, we won’t let you down.
Author:
James Keable
Mortgage Services Director | Capital Private Finance
