25 January 2022

Press Coverage

Mortgage approvals were unmoved at 66,964 in the month following the end of the stamp duty holiday in September, according to the Bank of England, with plunging mortgage rates continuing to support the market. Mark Harris of SPF Private Clients said: ‘While the Bank increased base rate in December, lenders remain keen to lend and have plenty of cash to do so. We expect mortgage rates to be competitive for the foreseeable future.’ The Daily Telegraph, 4 January 2022

The number of buyers taking their first step onto the property ladder has reached the highest level since 2006, according to Yorkshire Building Society. Mark Harris of SPF Private Clients said: ‘Even though the Bank of England finally made its move and increased interest rates in December, confidence in the housing market continued unabated. As we head into a new year, mortgage rates remain competitive and lenders keen to lend. Buyers will need all the help they can get as affordability becomes more stretched than ever and with the Bank considering easing stress testing rules for first-time buyers, this will help.’ This is Money, 4 January 2022

More than half of new customers are taking out five-year fixed-rate mortgages, according to Santander. Mark Harris of SPF Private Clients said: ‘Pricing is extremely competitive, with five-year fixes not costing much more than shorter fixes of two or three years. There are also potential cost savings associated with not having to remortgage every couple of years, as well as the removal of the hassle factor. Uncertainty around the UK economy and future base rate movements is also encouraging borrowers to fix for longer.’ The Times, 8 January 2022

The Bank of England reports that demand for remortgaging remains strong. Mark Harris of SPF Private Clients said: ‘With many mortgage deals set to expire this year, it is likely that many borrowers will take the opportunity to remortgage, particularly given the cheap fixes still available and the potential threat of rising interest rates.’ The Financial Times, 14 January 2022

London house prices climbed to an all-time high in November but are still rising at only half the pace of the rest of the country, according to latest Land Registry data. Mark Harris of SPF Private Clients said: ‘Despite the global pandemic, the housing market was able to thrive last year and there are still those who have not yet made their purchase. Squeezed affordability would be an issue, preventing first-time buyers in particular from getting on the ladder, but the Bank will be mindful that as we come out of a pandemic, a succession of significant rate increases could be extremely damaging to the wider economy.’ The Evening Standard, 19 January 2022

Mortgages are becoming more expensive along with a rise in swap rates, the rate at which banks borrow from one another. ‘As the cost of borrowing increases for banks, inevitably mortgage rates will also creep up,’ said Mark Harris of SPF Private Clients. He added that tighter affordability rules would be ‘of more concern to borrowers’ than a slight rise in interest rates. ‘If property prices continue to rise at the same pace, that may mean they cannot afford the property they want.’ The Sunday Times, 23 January 2022