Let a Mortgage Broker take the strain

Purchasing or remortgaging your home can be overwhelming and it is often considered one of the most stressful things you can do. Income and affordability are common concerns, and a mortgage is far more complicated than simply opting for the lowest rate or the best incentives. Finding out the best rate, length of term, which lender to choose, specifying features and understanding insurance are all time-consuming and complex matters.

For something as important as a mortgage it makes sense to get expert help from someone who deals with them day in, day out – a mortgage broker. Whether you’re a first-time buyer, purchasing your dream home, or looking to remortgage, working with a broker is an excellent way to source your mortgage. Let’s look at some of the reasons why.

  1. Brokers are experienced with complex cases

One of the main benefits of working with a broker is you can rely on their knowledge and experience of the market. If your application is more complex, for example because of your employment history, the property in question, or your financial situation, a broker will have the experience to help.

From applicants with multiple income streams, gifted deposits and self-employed applicants, mortgage brokers can advise you on your best option.

  1. Mortgage brokers remove the hassle

Brokers take the time to fully understand the needs of each client, so they get to know what you need, not just now but in the future. They do all the hard work for you, gathering the required information and documentation to conduct research. At Springtide Capital this means accessing products from more than 100 lenders to find the most suitable deal.

No one enjoys completing forms, especially for something as involved as a mortgage. Once you’ve made an informed choice based on a complete picture of the options available, your broker will prepare and submit your application for you. They’ll follow this up with a personalised report setting out and confirming their reasons for their advice and recommendations.

  1. Dedicated support

Alongside your mortgage consultant, at Springtide Capital we will allocate you a dedicated case manager. They will ensure your application proceeds as smoothly and speedily as possible, and they actively follow up with lenders through every step of the process. They can also liaise with third parties, such as solicitors, saving you valuable time and reducing concerns.

  1. Providing peace of mind

Understanding how you can protect your mortgage payments and safeguard your home if the worse should happen is vital. Our in-house protection specialists at Springtide can review and arrange the appropriate cover for personal and/or business customers ensuring you are completely aware of the risks and how best to mitigate them.

We are experts at helping clients to find the best possible options for their circumstances. At Springtide Capital our experts monitor all market indicators closely. Speak to us today to see how we could help you find the solution that’s right for you.

Contact Springtide Capital on 020 8154 7280.

Later Life Finance – first time buyer support for a family member

Later Life Finance can help a variety of needs such as repaying an existing mortgage, supplementing retirement income, home improvements or providing financial assistance to your family.

In 2022/2023 there was an increase from the previous year of 9% in first time buyers receiving help from their family and friends to get onto the property ladder.

Nearly one in five (18%) parents and grandparents who helped their family members onto the property ladder used their own property wealth to do so. 11% of this amount took out a lifetime mortgage to make a financial gift to a family member.

What is a Lifetime Mortgage?

A Lifetime mortgage is the most common type of Later Life finance. It is a loan secured against your property which does not require monthly repayments. You retain ownership of your property and the interest payable on your mortgage is usually rolled up and added to the loan, but some plans do offer the flexibility where you can pay the interest. You can access some of your equity through a lump sum or a combination of a lump sum and drawdown facility. The loan and the rolled up interest is repaid when the last remaining person dies or moves into permanent long-term care. The amount you can borrow depends on your age and value of your property and you must be over 55 years of age to apply.

With a Lifetime mortgage, you should be aware that this will not be suitable for everyone, may reduce your options for moving and selling your home in the future, will reduce the value of your estate and may affect your entitlement to state benefits.

At Springtide Capital we are committed to providing clear, impartial advice and an excellent level of service and would advise on other options for example Interest only Mortgages and mainstream residential mortgages, to establish the most suitable option. The role of advisors here is key to a full understanding of this complex area.

Gifted Deposits

If you do choose to help your family members get on the property ladder through Later Life financing, one of the ways to do this is through a gifted deposit.

In 2023, the average first-time buyer deposit in the UK was £53,414, although in Greater London, the deposit amount was more than double. For many first-time buyers, saving this amount of money is unachievable and this is why so many aspiring homeowners look for financial help from family members in the form of a gifted deposit.

A gifted deposit is money given to a homebuyer to help them buy a property, the sum can be part or the whole amount of the deposit. 5% is considered the smallest amount required by a mortgage lender in terms a deposit and the bigger your deposit, the better position you are in. A bigger deposit will give you more choice of mortgage products and will mean you need to borrow less overall, keeping your monthly repayments at a lower level. You can also use a gifted deposit to add to any deposit amount you have saved.

In general terms, mortgage lenders prefer it if the person gifting you the money is an immediate relative, such as a parent, grandparent or sibling. You can also receive a gifted deposit from a partner. A gifted deposit is given with the understanding that the money doesn’t need to be repaid. There are no rights or legal interests to the person gifting the deposit. There is no limit on how large a gifted deposit you receive can be, unless a lender stipulates this. In the UK, gifted deposits are generally tax-free, the gift however could be subject to inheritance tax.

Talk to your broker about all aspects of a gifted deposit as they will be familiar with the lenders criteria and will be able to steer you through the required checks and legal paperwork. It is important to seek advice in this area and other options are available to assist a first-time buyer such as Guarantor Mortgages, Family Springboard Mortgages and joint borrower sole proprietor mortgages.

To discuss your mortgage requirements today contact Springtide Capital on 020 8154 7280.

Sources:

https://www.gov.uk/government/collections/english-housing-survey-2022-to-2023-headline-report

https://group.legalandgeneral.com/media/ee3bnxvm/bof-equity-release-final.pdf

Average house deposit UK 2023 | Statista

Mortgage Charter put in place to support borrowers

The Mortgage Charter

Whilst the Government is actively committed to halving inflation by the end of 2023, the current pressure on household spend continues due to the impact of successive base rate rises. In recognising that this is a concerning time for mortgage holders, particularly those who are due to come to the end of their existing deal in the immediate term, the Government have committed to working even more closely with lenders to make sure borrowers are supported.

“…We will do what it takes, and we won’t flinch in our resolve because we know that getting rid of high inflation from our economy is the only way that we can ultimately relieve pressure on family finances and on businesses.” Rt Hon Jeremy Hunt MP, Chancellor of the Exchequer

The Chancellor met with the UK’s largest mortgage lenders, UK Finance and the FCA on Friday the 23rd June. At this meeting, lenders agreed to new commitments in the 13-page Charter, to support borrowers at this challenging time. Lenders will supply specifically tailored support for anyone struggling with payments and provide well-timed information to help customers plan ahead. Anyone who is concerned about their mortgage payments are encouraged to contact their mortgage lender early, and this will not impact on their credit file.

The lenders have agreed:

  • From 10 July, customers approaching the end of a fixed-rate deal will have the opportunity to lock in a deal up to six months ahead. They will also be able to manage their new deal and request a better like-for-like deal with their lender right up until their new term starts, if one is available.
  • A new deal between lenders, the Financial Conduct Authority and the government permitting customers who are up to date with their payments to:

Switch to interest-only payments for six months, or

Extend their mortgage term to reduce their monthly payments and give customers the option to revert to their original term within six months by contacting their lender.

  • From 26 June, a borrower will not be forced to leave their home without their consent unless in exceptional circumstances, in less than a year from their first missed payment.

Lenders who have signed up to the charter are:

  • Aldermore Bank
  • Bank of Ireland UK
  • Barclays
  • Bath Building Society
  • Buckinghamshire Building Society
  • The Co-operative Bank, including Platform and Britannia
  • Coventry Building Society
  • Danske Bank
  • Darlington Building Society
  • Earl Shilton Building Society
  • Ecology Building Society
  • Family Building Society
  • Furness Building Society
  • Glasgow Credit Union
  • Hinckley & Rugby Building Society
  • HSBC, including First Direct
  • Kensington Mortgage Company
  • Leeds Building Society
  • Leek Building Society
  • Lloyds, including Halifax and Scottish Widows
  • Loughborough Building Society
  • Melton Mowbray Building Society
  • Metro Bank
  • Monmouthshire Building Society
  • Nationwide Building Society
  • Natwest, including RBS and Ulster Bank
  • Newbury Building Society
  • Newcastle Building Society
  • Nottingham Building Society
  • Principality Building Society
  • Progressive Building Society
  • Santander
  • Scottish Building Society
  • Skipton Building Society
  • Suffolk Building Society
  • Teachers Building Society
  • Tipton & Coseley Building Society
  • TSB, including Whistletree
  • The Vernon Building Society
  • United Trust Bank Limited
  • Virgin Money, including Clydesdale Bank and Yorkshire Bank
  • West Bromwich Building Society
  • Yorkshire Building Society

These lenders represent approximately 90% of the mortgage market.

In addition, the FCA has introduced:

  • new guidance clarifying how lenders can support borrowers impacted by the rising cost of living
  • information for borrowers on the options and support available if they are struggling with payments

In order that borrowers are made aware of what to expect when they need support from their lender, UK Finance will be launching a communications campaign. Whilst many lenders have existing plans in place, the Charter builds on this existing support and helps reassure mortgage holders that there are a number of government backed options available if they are concerned about meeting their repayments.

Sources:

https://www.gov.uk/government/publications/mortgage-charter/mortgage-charter

Homepage | UK Finance

Financial Conduct Authority | FCA

‘Best Broker Firm for Overall Quality 2023’ award for Springtide

We have won the ‘Best Broker Firm for Overall Quality’

With numerous changes happening on a national and global scale, Springtide Capital are proud to have sustained our high-level of overall quality and remained a trusted expert in the mortgage market. We are pleased to have been recognised by the Legal and General Mortgage Club with their ‘Best Broker firm for Overall Quality’ award for 2023.

Around 60% of all our activity is repeat business, demonstrating the high-level of overall quality we provide. We take every complaint extremely seriously and have only had one in the last year which has now been satisfactorily resolved. Our role is a long-term partnership with the client, as we proactively monitor rates ahead of our customers renewal date, offering expert insights into the market, supported by our strong relationships with lenders and underwriters.

In a fast-moving and economically challenging market, our skilled team have evolved to support our customers. Alongside your mortgage consultant, Springtide Capital will allocate you a dedicated case manager. Over the last year we have further increased our number of case managers, enabling us to offer a highly effective and personalised service. Our experienced mortgage consultants and case managers keep up to date with any initiatives and financial changes that have materialised, ensuring our customers have every opportunity to find the best possible deal.

“I am incredibly proud of the team. They work incredibly hard to find our clients the right deal and go above and beyond what’s expected. The fact that over 60% of our business is repeat business is a credit to the time and energy they invest in our clients and into securing a positive experience.” Henry Knight Managing Director, Springtide Capital.

To discuss your mortgage requirements today contact Springtide Capital on 020 8154 7280.

Sources:

https://www.legalandgeneral.com/adviser/mortgage-club/events/awards/

Return of 100% loan to value mortgage

The housing market needs first-time buyers to keep it moving. While the average age of first-time buyers has been creeping up and now stands at over 33 years of age, the number of buyers has dwindled, falling by more than 10% between 2021 and 2022. People are finding it harder and harder to make the leap from renting to buying. When buying your first home, it is normal to need to pay a deposit of around 10% of its value. A bank or building society will then loan you the rest. The launch of Skipton’s new product, called the ‘Track Record Mortgage’ could be just what the market needs to reverse these figures.

While 100% mortgages have been available before, this one specifically supports those with a strong rental record. To be eligible, applicants must have paid 12 monthly rental payments in a row over the last 18 months, paid household bills for the past year and be up to date with any loan or credit card repayments. In the current economic climate, with so many finding it impossible to save for a deposit while paying rent, this removes that obstacle, creating fresh opportunities for renters to become homeowners.

Charlotte Harrison, CEO of Home Financing at Skipton:

“We recognise there’s a clear gap in the market for people who have a strong history of making rental payments over a period of time so can evidence affordability of a mortgage – but there is currently no solution for them to buy a property due to lack of savings or access to family wealth. It is time for a re-think on these massive barriers to home ownership, and we’re proud to take the lead on bringing to the market, solutions for such a massive social problem.”

This product is fairly limited in scope, available only over five years at a fixed rate of 5.49%. This will limit Skipton’s exposure, as will the maximum term of 35 years. The maximum loan available is £600,000.

While there is excitement around this announcement there is also some caution, specifically around the risk of negative equity. Skipton will need to carefully consider each applicant and assess their suitability.

Henry Knight MD of Springtide Capital comments:

“100% mortgages have returned to help first-time buyers start their journey on the property ladder. Mortgage applicants and lenders need to keep the potential risks in mind when considering this type of mortgage. However, with applicants needing to show they can meet all their monthly bills consistently, it shows the lender is taking a responsible approach.”

This could be a game changing moment for those who need help the most.

It is very important to consider your options in detail when looking at any type of mortgage. We can help you decide the best option for you. Get in touch on 020 8154 7280.

Sources:

First-time Buyer Statistics and Facts: 2023 | money.co.uk

A simple guide to buying your first home – Times Money Mentor (thetimes.co.uk)

Press Release Article – Skipton Building Society

 

Mortgage market review

In a month where inflation remains stubbornly high, The Bank of England’s Monetary Policy Committee (MPC) continues to revise monetary policy to meet the 2% inflation target. At its meeting this month the MPC voted to increase Bank Rate by 0.25 percentage points, to 4.5%.

This is the 12th consecutive rise in interest rates. The MPC in its summary, has not ruled out further rate rises to help meet their 2% target in the medium term.

Official bank rate:

Source: Bank Rate history and data | Bank of England Database

Borrowers may be concerned about whether this is the right time to take out a mortgage. Seeking advice is vital to ensure borrowers can comfortably afford to refinance based on their own individual circumstances.

There are however, many positive narratives across the mortgage market this Spring:

Figures from the Office for National Statistics released on the 24th May show that inflation has started to fall, down to 8.7 per cent in April, down from 10.1 per cent in March.

  • The Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 7.8% in the 12 months to April 2023, down from 8.9% in March; on a monthly basis, CPIH rose by 1.2% in April 2023, compared with a rise of 2.1% in April 2022.
  • The Consumer Prices Index (CPI) rose by 8.7% in the 12 months to April 2023, down from 10.1% in March; on a monthly basis, CPI rose by 1.2% in April 2023, compared with a rise of 2.5% in April 2022.

New buyers, who are vital to keep the market moving will be able to access Skipton’s new product, this May. Called the ‘Track Record Mortgage’, it is the UK’s first 100% LTV Mortgage exclusively for renters. The product will enable renters to access the property ladder without a deposit. Tenants who can evidence affordability for a mortgage and have a strong track record of rental payments can borrow up to 100% of a property value.

House price growth shows signs of stabilisation in April according to the Nationwide house price index:

  • April saw a 0.5% rise in house prices after seven consecutive falls
  • Annual rate of house price growth improves to -2.7% from -3.1% in March
  • The average UK house price is £260,441

As global and economic concerns continue to influence the mortgage market, speak to one of our experienced team today to find the right solution for you. Call us on 020 8154 7280.

Sources:

https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2023/may-2023

Consumer price inflation, UK – Office for National Statistics

Press Release Article – Skipton Building Society

House price growth shows signs of stabilisation in April (nationwidehousepriceindex.co.uk)

Six major lenders update their cladding criteria

In the period since the tragic Grenfell Tower fire of 2017, understanding unsafe cladding has been a key issue when it comes to mortgages. Many of those living in similar buildings have been unable to remortgage or to sell their properties. Steps taken in response to the Grenfell Tower tragedy understandably resulted in revised regulation surrounding cladding and fire safety.

Measures included needing an ‘EWS1’ form, when applying for a mortgage. This is a type of safety certificate introduced after the Grenfell disaster. This form requires a professional survey of the property to determine the safety and suitability of the cladding, insulation and other materials used in its construction. Being unable to get this certificate has meant that some leaseholders and freeholders of high-rise buildings have become trapped in their existing mortgages.

The introduction of new industry guidance in January 2023 issued by the Royal Institution of Chartered Surveyors (RICS), helps valuers assess properties with cladding. As a result of this guidance, owners may now be able to sell and remortgage more easily, due to six major lenders agreeing to lend on affected properties. The six lenders who have updated their criteria are: NatWest, Santander, Barclays, HSBC, Lloyds and Nationwide.

It is a positive step forward in an area of lending that has been challenging. You will however, need to provide evidence that at least one of the following applies for you to get a mortgage from one of the six lenders:

Unfortunately, this means that if there is no remediation plan in place and you aren’t covered by one of the existing Government schemes, it will remain challenging to get a mortgage.

As the evidence required varies by lender, it is best to understand exactly what evidence is required before you apply. So, whilst it is positive that Banks will now lend on properties if the mortgage application meets individual lenders’ policy and regulatory requirements, there is still some way to go. Some lenders remain cautious about the government guidance surrounding higher-risk buildings

Henry Knight from Springtide Capital comments: ‘Existing homeowners who have found finding a mortgage deal on their property almost impossible are in a stronger position now in 2023. It is crucial that more lenders join the six existing banks to give customers as much choice as possible through increased competition’

Our expert advisors are here to find the right financing option for you. We understand the criteria required and can help improve your chances of a positive mortgage offer. Contact us today on 020 8154 7280

 Sources:

https://en.wikipedia.org/wiki/Grenfell_Tower_fire#:~:text=On%2014%20June%202017%2C%20a%20high-rise%20fire%20broke,with%20more%20than%2070%20injured%20and%20223%20escaping

Cladding External Wall System (EWS) FAQs (rics.org)

Valuation approach for properties in residential buildings with cladding (rics.org)

Developer remediation contract – GOV.UK (www.gov.uk)

Medium-Rise Scheme (MRS) pilot opening: leaseholder factsheet – GOV.UK (www.gov.uk)

Remediation of non-ACM buildings – GOV.UK (www.gov.uk)

https://hoa.org.uk/2023/02/government-cladding-update/#:~:text=February%201%2C%202023%207%20minute%20read%20In%20the,their%20towers%20or%20face%20a%20ban%20on%20developing.

https://www.gov.uk/government/publications/developer-remediation-contract?_ga=2.120442056.130233984.1678110522-1149413627.1678110522

Getting you through the mortgage maze

With hundreds of mortgages available, it can be daunting getting started on the journey to securing a mortgage. There are many things you can do to make the process as easy as possible. Here we will highlight some of them.

Preparation

Get your paperwork in good order. Having the information to hand from the outset will stand you in good stead and will make the process less stressful for all involved.

A good example of the kind of information you will need to organise is the information required to apply for your ‘decision in principle’. This is often seen as the first step to buying or remortgaging a home. It helps you understand how much you could borrow before you apply for a mortgage.

To get your decision in principle you will need to provide confirmation of your personal details, know your regular outgoings, debt repayments and regular living expenses. Plus your salary and any other income that you receive on a regular basis. You will require at least a months’ worth of bank statements. You’ll need at least your last 3 months of payslips, your last P60 and evidence of any other income. If you’re self-employed you may have to provide several years’ business accounts.

An decision in principle is obligation-free and having one shows that you can, in theory, afford to buy a property. To get one, you’ll either need to approach a mortgage lender directly or via a mortgage broker.

Seek advice – Mortgage brokers

For something as important as a mortgage it makes sense to get expert help from someone who deals with them day in, day out. A mortgage broker has a key role to make sure you never pay more than you need to. They are able to review the mortgage market and apply for a mortgage for you based specifically on your financial circumstances. Due to their knowledge of each lenders underwriting criteria, they can advise you on which lenders are likely to accept you and which ones aren’t. This helps avoid delays and is important as it may have an impact on future applications. Brokers have access to software that allows them to search mortgage deals much faster and more thoroughly than you could yourself. A good broker can save you a lot of time and stress.

For more benefits of using a mortgage broker please read our article.

Get ahead

 If you arrange your mortgage as early as possible, you’ll be in a stronger position with sellers and estate agents. On average, offers typically take 3 weeks to come through, from when you apply for your mortgage to receiving your mortgage offer. Each offer lasts for a fixed amount of time, usually between 3-6 months. If there are likely to be any problems with your application it is best to know at the start and have time to remedy. The best advice is to start the process before you start seriously looking for somewhere to buy.  If you have an existing mortgage, it’s always best to lock in a new mortgage to start as soon as your previous deal ends.

Henry Knight from Springtide Capital advises: “We urge anyone coming to the end of their current deal to start talking to a broker at least seven months prior to that deal finishing. Acting early and decisively will be hugely beneficial.”

To help you navigate it all and to discuss your mortgage requirements today contact Springtide Capital on 020 8154 7280

Sources:

 How to buy a home – GOV.UK (www.gov.uk)

Why use a mortgage broker? | Springtide Capital

 

Why use a mortgage broker?

How many times does the average person in the UK move house? Surprisingly, according to a recent poll from Zoopla it’s only once every 23 years. This has risen dramatically since the late 80s when the average was a little under nine years. Given this and the fact that about 85% of current mortgage stock in on fixed term deals, the average person’s experience of finding a new mortgage is limited. For something as important as a mortgage it makes sense to get expert help from someone who deals with them day in, day out.

So, what is stopping more people from using mortgage brokers? One reason is that it is now for more straightforward to get mortgage quotes. The rise of comparison websites has made it possible to get the rates for a wide variety of mortgage deals in a matter of few minutes.

However, when it comes to mortgages, rates are just part of the picture. Each lender has their own underwriting criteria, which is often extensive. According to Experian, lenders reject a third of customers using comparison sites as they do not meet their full lending criteria. A mortgage broker will gather all the information necessary and only present deals that you qualify for, preventing any unnecessary disappointment or delays.

This is just one reason to use a mortgage broker, here are four more.

Removes the hassle

Mortgage consultants at Springtide Capital take the time to fully understand the needs of each client, so they get to know what you need not just now but in the future. They do all the hard work for you, gathering the required information and documentation to conduct research with more than 100 lenders to find the most suitable deal for you.

No one enjoys completing forms, especially for something as involved as a mortgage. Once you’ve made an informed choice based on a complete picture of the options available, your consultant will prepare and submit your application for you. They’ll follow this up with a personalised report setting out and confirming their reasons for their advice and recommendations.

Dedicated support

Alongside your mortgage consultant, Springtide Capital will allocate you a dedicated case manager. They will ensure your application proceeds as smoothly and speedily as possible, they follow up with lenders through every step of the process. They can also liaise with third parties, such as solicitors, saving you valuable time and reducing additional worries at this already stressful time.

Providing peace of mind

When there are so many uncertainties in the world, understanding how you can protect your mortgage payments and safeguard your home if the worse should happen is vital. Our in-house protection specialist can review and arrange the appropriate cover for personal and/or business customers ensuring you are completely aware of the risks and how best to mitigate them.

Superior service

Springtide Capital has one overriding objective – to make sure you never pay more than you need to. Your mortgage consultant’s role doesn’t stop once a deal is complete, this a long-term partnership. It is their job to always be looking forward, proactively monitoring rates ahead of your renewal date to ensure you act quickly, at the right time, to get the right price.

At Springtide Capital our experts monitor all market indicators closely, helping clients to find the best possible options for their circumstances. Speak to us today to see how we could help you find the solution that’s right for you.

To discuss your mortgage requirements today contact Springtide Capital on 020 8154 7280.

Sources

https://www.idealhome.co.uk/news/zoopla-average-brit-moves-home-181281

https://www.ftadviser.com/mortgages/2022/12/22/the-outlook-for-mortgages-in-2023/?page=2

https://www.mortgagesolutions.co.uk/news/2019/08/19/lenders-decline-a-third-of-customers-using-comparison-sites-experian/

Mortgage Outlook for 2023

All experts are predicting a bumpy ride for the economy in 2023. However, even just a few weeks into the year, we are beginning to see more positive signs that the picture won’t be as gloomy as was forecast at the end of last year. While consensus is that the UK will go into recession, the hope is this won’t be as deep as was feared. The Bank of England base rate, currently at 3.5%, will probably still rise, but HSBC have revised their forecast, predicting it won’t go higher than 3.75%.

The outlook for the housing market is similarly uncertain for 2023.There is consensus across the board that prices will drop, but by how much is still very much up for debate.

House prices fell in the last four months of 2022 and this trend is expected to continue, but the fall between November and December was just 0.1%. The market was quiet at the end of last year, as many people decided to wait and see what would happen with mortgage rates.

How much they will continue to fall in 2023 is uncertain. The most pessimistic warn the fall could be between 15% and 20%, but most believe it will be much less drastic than that. The Nationwide are predicting a slide, rather than a crash with a 5% reduction in prices.

What is clear is the housing boom fuelled by measures taken during the pandemic is over. British banks and building societies expect to lend 23% less to homebuyers in 2023 and the number of properties being sold is likely to be around 1 million, down from 1.27 million in 2022. However, there are reasons to back the more optimistic view of the year ahead and that the fall will be softer than some forecast.

These rate increases will only affect a limited proportion of the market. Around 85% of mortgage balances are on fixed interest rates, so they will be only affected by rate increases once they come up for renewal. According to the latest figures from the ONS, 1.4 million households in the UK are facing the prospects of interest rate rises when they renew their fixed term mortgages in 2023, but it is looking like their payments will go up substantially less than was feared.

While there will be some who will struggle to cover their mortgage payments, it is predicted that a relatively low number of people will be forced into moving in 2023. This is due to rising wages in the private sector, currently up to 7.2%, covering much of the price hikes caused by inflation. The unemployment rate is also predicted to increase only marginally, up to 5% from the current 3.6%, still low by historic standards.

There is no pretending 2023 will be a bumper year for the housing and mortgage markets. However, commentators believe that the decline will be temporary and modest growth will return in 2024.

At Springtide Capital our experts monitor the market closely, helping clients to find the best possible options for their circumstances, considering not the current situation but likely future outcomes. Speak to us today to see how we could help you find the solution that’s right for you.

To discuss your mortgage requirements today contact Springtide Capital on 020 8154 7280.

Sources

https://www.reuters.com/business/finance/hsbc-cuts-uk-terminal-rate-forecast-375-425-2022-11-04/

https://www.reuters.com/world/uk/uk-house-price-growth-slows-december-nationwide-2022-12-30/

Nationwide predicts 5% house price falls in 2023 – Your Mortgage

UK lenders see 23% slide in mortgages for home-buyers in 2023 | Reuters

https://www.ftadviser.com/mortgages/2022/12/22/the-outlook-for-mortgages-in-2023/?page=2

How increases in housing costs impact households – Office for National Statistics (ons.gov.uk)

Average weekly earnings in Great Britain – Office for National Statistics (ons.gov.uk)

https://www.cbi.org.uk/media-centre/articles/no-new-year-cheer-for-uk-economy-with-productivity-and-business-investment-weakening-cbi-economic-forecast