Mortgage Market Forecast - is now a good time to buy?

Thinking about getting onto the property ladder? Current rate coming to an end? 

Well, your day just got better, my friend because there’s good news up ahead.

For a while now, mortgage interest rates have been going up and down like a fisherman’s boat on the north sea. And in these unpredictable waters, it can be tough to know when to buy a new property, or to remortgage your existing one. 

That is, if you don’t have expert mortgage advice on hand to help. 

Well, Ahoy there! I’m Sam from Winchmore Mortgages and I’m here to guide you

through the choppy waters of the property market.

First off, how did we get here?

In the fall out from the 2008 credit crunch, banks really tightened up on their lending.  Then came along Brexit and the Covid-19 pandemic, each its own special brand of nightmare. With the UK economy on its knees, the Bank of England fought back by reducing the base rate. 

The base rate is what the Bank of England charges banks and mortgage lenders for borrowing money, which is then passed onto the consumer. Meaning that for a time we enjoyed mortgage rates under 2%.

Result!

But fast forward to September, 2022, the Liz Truss mini- budget threw in a sucker punch, scaring the banks half to death and causing a sharp rise in mortgage rates. 

Prices of everyday essentials, from petrol to satsumas, skyrocketed as inflation rose above 10%. The Bank of England had to do something. So, like a stern parent using tough love, it unleashed the best weapon in its armoury. 

It started to increase the Bank of England base rate.

When this went up, the increase was passed onto us, the consumers. And hey presto, mortgages became almost too expensive to take out. Meanwhile existing mortgage customers were faced with huge hikes in their monthly repayments.

So, erm, what’s the good news?

If recent years have taught us anything, it’s that nothing stays the same. And we’re definitely due a positive. But I’m a generous guy, so how about two? 

First off, the increase in the base rate has done its job and reduced our spending. As a result the cost of everyday items has come down in the last year. Gas, electricity and petrol have all dropped in price. 

Inflation is down to 2.3% as of April 2024. The Bank of England’s target is 2%. So, we still have a little way to go but overall this is really good news.

Add to this the general election fast approaching. Both the Conservative and Labour parties are promising large scale house building initiatives. The property market will be front and centre of both their election campaigns. With a proposed increase in housing supply, combined with help for borrowers.

Put all this together and there’s hope on the horizon. 

In fact, we’re already seeing some lenders reducing rates across their mortgage ranges. HSBC, Barclays, Virgin Money and TSB have recently reduced their mortgage rates.

Normally, when one of the bigger lenders reduces interest rates, others follow suit. 

The tide is definitely turning. 

Now’s the time to start planning

With all this going on, we’re eagerly watching this space for the Bank of England to reduce the base rate again. When this happens it’ll be all systems go. 

And you’ll need to be ready. 

So, whether you’re thinking of buying your first home, or you’re already a homeowner  looking for a new rate, what you’ll need is a sage advisor on your side. Someone who knows the landscape and can give you expert advice to keep you ahead of the game. 

That’s me, btw.

I’ll be busy tracking updates and scouring the market for the best deals. Posting updates here every month, along with up to the minute advice on the precise time to act.

So keep an eye out. 

If you’d like to have a free, no obligation chat about your individual options, give me a call or drop me an email.