Rose Capital Partners steadies mortgage nerves with rising rates and escalating property prices
Added: (Fri Nov 05 2021)
Pressbox (Press Release) -
A double push factor is now driving the mortgage market, creating uncertainty and the need for well informed decisions.
Indications are that the UK is on track to have the greatest year of house price growth since 2007, and that trend doesn't look like it will reverse in 2022.
Zoopla, one of the main property portals in the UK believes house price growth looks set to continue into 2022, offering a prediction of 3% next year, with London at 2% growth.
It's the same old property story of a large imbalance in the shortage of sellers versus the number of buyers in the market right now. This is driving the housing market to run at 30% above the 5 year average of transactions, and activity this year looks set to reach £473bn, up £95bn on last year.
It does appear that above-inflation growth is highly likely and while wages are picking up, they can never fully keep pace with an already inflated market, so the smart home movers will be the ones doing so as early as possible.
The last Stamp Duty holiday ended in September, which prompted a big increase in net lending. While the deadline was a factor, we have also seen a significant increase in people remortgaging to lock in long-term fixed rates as the widely tipped rise in interest rates looks set to happen before year-end or early 2022.
This double push factor is now propelling the market - rising mortgage rates and rising property prices - so while we will no doubt see the annual slow down over the festive period, mortgage brokers are set to be busy right up to Santa's arrival, picking up again in January in the same vein.
Richard Campo, Managing Director of London mortgage brokers Rose Capital Partners commented “Money Markets continue their march upwards, which is now filtering through into higher mortgage rates. The 3-month Libor rate is now firmly at 0.25%, which suggests the base rate will go back to that level in the foreseeable future, so the only debate is, does that happen in December 2021 or early 2022?”
Clients continue to contact Rose Capital Partners at a terrific rate, seeking advice on their options at this time of uncertainty in the mortgage market. Rose Capital brokers have been reassuring home purchasers and those remortgaging that their default position stands. Unless a client has any specific needs, it is likely they would recommend a longer-term fixed rate if a client has a 25% + deposit or equity but suggest keeping it short term or flexible if less than that figure.