Positive signs for the mortgage market

Wednesday 10 May, 2023

Call Fortune Financial Planning for mortgage advice

In this article Cade Somerville, mortgage adviser at Fortune Financial Planning in Hitchin Hertfordshire reviews why there are positive signs in the mortgage market this spring. If you are due to remortgage or are a home mover, please call our mortgage broking team on 01462 510400 so we can review your mortgage options and provide personalised mortgage advice.

Housing market picking up? 

There are some positive signs this spring from the housing market. The Bank of England indicated that the number of mortgage approvals in the UK for those buying a home increased, as mortgage loan approvals for house purchases rose 18% between February and March 2023, up from 44,100 to 52,000.

Why are mortgage approvals going up?

Although mortgage approvals are still below the average for 2022, they have picked up which suggests people are more optimistic about the housing market going forward. Housing market activity fell in Autumn 2022 following the September mini-budget and it has taken the last six months for people to feel more confident again. Mortgage rates having been at a fourteen year high have now come back and are closer to levels that lenders were offering before the mini budget.

UK house prices rose in April 2023

According to the Nationwide Building Society UK house prices rose 0.5% in April 2023 following seven consecutive months of falling house prices. The Nationwide is now predicting a ‘modest recovery’ in the housing market. According to Nationwide more mortgages are being approved and if inflation falls in the second half of the year as it is forecast to, households are going to feel more confident about their financial situation. 

IMF economists forecast interest rates back nearer pre-pandemic levels

Although the Bank of England are likely to raise interest rates again this Thursday 11th May the news from the IMF economists is that real interest rates are likely to fall when inflation reduces. If this prediction comes true it’s likely that mortgages could get even cheaper as we head towards 2024. According to Moneyfacts on 9th May the average two-year fixed deal is currently 5.30% and the average five-year fixed deal is 5.03%. We are not used to seeing the two-year fixed higher than the five-year fixed, the last time this happened was 2008.

Cade Somerville, mortgage advisor at Fortune Financial Planning in Hitchin Hertfordshire said: 

‘Higher borrowing costs and the cost-of-living crisis has significantly affected the demand for new homes recently, but it is really encouraging that there are now signs that the housing market is starting to pick up. However, we are still seeing interest rates going up in the UK. Every time this happens mortgage lenders pull their products so it’s important to organise your remortgage at least six months before you need it. 

At Fortune Financial Planning we work with anyone remortgaging, home movers, commercial buy to let landlords and first-time buyers. If you are remortgaging we can discuss your options with you.’ 

Cade continued: ‘It is a particularly difficult time in the mortgage market which is why we recommend you take mortgage advice before you decide which product to purchase. It has been fifteen years since two-year rates were more expensive than five-year deals. We can discuss with you what could happen to the mortgage market over the next few years, you have lots of different options. For example, you may decide not to fix for five or ten years even though mortgage rates may be cheaper, as it might be prudent to have the option to fix again in a few years’ time. However, we always review a client’s financial circumstances before offering mortgage advice, so you know you have a personalised recommendation. 

For most people their mortgage is their largest outgoing so if you are due to remortgage we recommend you invest some time in working out the best mortgage option. Give our mortgage brokers a call on 01462 510400 or complete our booking consultation and we will be in touch to organise an initial consultation.’

In Summary…

Talk to the Fortune Financial Planning mortgage broking team if you are due to move house or need to remortgage. Our mortgage advisors can explain your mortgage options, so you make the best decision in this difficult mortgage market.

Cade Somerville
Mortgage Adviser, Fortune Financial, Hitchin

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