Mortgage lending set to fall in 2023 (Source: www.fcfunding.co.uk)
Mortgage lending is set to fall to levels not seen since before the pandemic of 2020, according to some experts. 2022 has been, to put it lightly, a disastrous year for mortgages and a difficult year for personal finances in general. The country are still in the dark a little bit about whether or not the UK is in a recession yet but all arrows point that way. A combination of bad decisions from government rule makers, the war in the Ukraine and general over spending post lockdown has meant that the UK now finds itself in the midst of an economic crisis.
Mortgages
We all know by now that the rising Bank of England base rate has caused mortgage lenders to increase their own rates significantly over the last few months and mortgage lending has become more and more difficult for even the most straight forward of loans. Higher rates have unfortunately meant that a lot of people are now unable to afford monthly mortgage payments that would normally have been easily within their budget and potential new borrowers have become discouraged from taking out property finance. In fear that rates could go even higher.
But this doesn’t look likely. Mortgage rates have already come down significantly since they shot up a few months ago and despite threats of the BOE base rate increasing again, the general consensus is that lenders have a lot more confidence in the market than before, so are unlikely to increase rates again.
Slump In Mortgage Lending
Despite this positive news at the end of 2022, experts are warning that mortgage lending is likely to decline to pre 2020 levels in 2023 as a fallout from the rate increases and product withdrawals seen this year. Finance researcher and reporter UK finance have released figures that predict that mortgage lending as a whole will fall by as much as 15% in 2023. They also predict that mortgage lending for house purchases specifically is likely to fall by as much as 23%, almost entirely down to the struggling economy and cost of living crisis. Buy-to-let purchase are by far the worst hit with UK finance predicting a 27% decrease in buy-to-let mortgages in 2023.
But, it’s not all doom and gloom as UK finance point out that re-mortgages and product transfers are likely to see a big upturn in 2023 as people start to come off their fixed rate products. Although these people are likely to be coming off sub 3% fixed deals and being offered 4% or more, UK finance are predicting to see £212 billion of product transfers occurring in 2023. People will want to avoid the lenders SVR rate and risking even higher interest rates so there will be an upturn in re-finances.
What Can I Do If I Want To Purchase A Property In 2023
The most important thing to note if you are still interested in purchasing a property in 2023 is that there is definitely still a mortgage market for home buyers, despite what it might look like. Interest rates are higher than before, yes, but they are much better now than they were and historically are still low. With the help of a professional mortgage advisor who has access to the whole of market such as ourselves, you will be able to find the best mortgage deal with the best lender on the best rate for your circumstances. We will never secure a loan for you that you can’t afford. Give our team a call today to see how we can help you.
If you are looking to re-finance a property, 2023 is your year. We are experts in remortgages, product transfers and rate switches so please give our team a call.
