Now could be a good time to move home

House Prices

The end of the Stamp Duty Holiday in September has resulted in a decrease in the number of monthly property sales. However, house prices still remain buoyant and according to the Office of National Statistics, UK house prices have increased by 10.2% over the past twelve months.

Looking forward, Rightmove suggests house prices are likely to continue to rise in 2022 after it has experienced its busiest start to a year, with the number of prospective buyers enquiring about homes up 15% on the same time last year. Whether this happens or not remains to be seen but early indications are house buyers are still looking for that extra indoor/outdoor space after the Covid-19 pandemic.

Bank of England Base Rate

We have recently seen two increases in the Bank of England Base rate. The first of 0.15% in December was the first increase since August 2018. This was followed by a further 0.25% in February taking the base rate to 0.5%. Despite these increases, mortgage rates remain incredibly low.

With inflation running high at the moment, the Bank of England’s Monetary Policy Committee may be forced to act further in the months ahead and increase the base rate further. Great news if you are a saver but not so great for borrowers. So now would be good time to review your mortgage situation. Especially, as mentioned already with property price inflation, you may well qualify for a better rate purely by virtue of your house price increasing.

Borrowing Criteria

Thankfully, lenders have eased qualifying criteria in obtaining a mortgage. The pandemic was an unknown for so many including lenders who withdrew from allowing furlough, overtime and bonuses being allowed as part of income. These restrictions have now mostly been withdrawn making borrowing a bit easier than a year ago.

Buy-to-Let

Buy-to-Let (BTL) is another strong mortgage market. According to Hometrack’s Q3 rental market report, the availability of properties to let is 43% below the five-year average whilst tenant demand is 55% above the average. These figures have contributed to a 13-year high of rental inflation. Shortage of stock to buy will not help these trends but lenders are keen to be a part of this market so the opportunities to re-mortgage an existing BTL property to a cheaper rate is worth taking the time to investigate.

With interest rates so low, now is a good time to fix in a good deal to alleviate the concern that interest rates may increase further as we get back to a ‘new normal’ way of living.

Here at Blake and Day, we are registered for all types of mortgages, later life lending and additional borrowing. Please contact Mark with any enquiries you might have, and he will be more than happy to help you.

Disclaimer: The opinions expressed in this blog are those of the authors and Blake and Day assumes no responsibility or liability as to the content is provided only for information purposes. No reader should act on it without receiving full advice.