It might seem that the mortgage market is all doom and gloom – when in fact it isn’t!
The 2022 mini budget, cost of living and inflation did create uncertainty for many of us and these factors do influence the housing industry, however it’s not all as bad as is often reported. The market is now more in line with where it was pre-covid and you can find mortgage interest rates at the sub 5% mark, and in general, there are plenty of deals available.
Many of us are pleased that the frenzied activity of bidding wars is behind us and for those who were put off moving by the intense market, it seems that now might be a good time to consider a move. Lack of availability, and therefore finding a suitable home, has been replaced with a more stable market and more choice which is good news for current buyers and sellers.
In Rightmove’s May Market Report they note that the average price of property coming to the market jumps by 1.8% (+£6,647) to reach a new record of £372,894 in a delayed response to the higher-than-expected level of market activity since the start of the year:
* This 1.8% monthly increase is the biggest of the year so far, and is significantly higher than the historic average May rise of 1.0%.
* Agreed sales numbers are currently just 3% behind the last more normal pre-pandemic market of 2019
* The discount from final asking price to agreed sale price has steadied at an average of 3.1%, in line with normal market levels, reflecting home-mover confidence in the outlook for the market.
* Average mortgage rates are remaining steady despite another increase in the Bank of England base rate with an average 5-year fixed, 15% deposit mortgage now at 4.56%, compared to 5.89% last October.
On another positive note, on average, homes are selling twelve days more quickly than at this time in 2019.
Stonebridge Homes work with, amongst others, MAB New Homes Mortgages, who are dedicated new build mortgage specialist, offering professional and impartial advice on mortgage products from over 90 lenders. We caught up with Scott Richford, Mortgage and Protection Adviser at MAB New Homes Mortgages, and he commented:
“Mortgage deals are driven by swap rates and don’t directly move in line with the Bank of England Base Rate so even though we have seen Base Rate rises since the infamous mini budget in 2022, we have now seen the majority of those rises come back out and rates are not far from where they were. We have seen lenders move into new areas of new build at higher loan to values than they have been before, and we are seeing great deals offered by builders to support potential buyers along with lenders trying to increase affordability, particularly if you are willing to commit to a longer-term fixed rate. It’s great to see Skipton BS trying to support 100% mortgages for First Time Buyers who have a good track record in renting. We have seen increased levels of activity year on year so lots of people are still looking to buy.”
Everyone’s circumstances are different. Basically, the larger deposit you have (loan to value), potentially the better deals you may be offered as there’s a lower risk to the lender. Talking to an independent mortgage adviser can help you get a sense of what you can afford, and which lenders might be available to you. Contact one of our sales advisers to find out more.