This is our take on what is currently happening in the mortgage market. Our views are often cited in several national publications, including; The Times, Telegraph, Financial Times, FT Adviser and Daily Mail, as well as a number of key trade publications, so this should keep you ahead of the curve. If you have any questions on any of these stories, or would like further information, please do not hesitate to get in touch.

  • Lender’s timescales finally improving in general – good news for borrowers
  • Why fixed rates are falling and how the next base rate announcement may impact this

Lender’s timescales finally improving in general – good news for borrowers

Lender Timescales

Some lenders have had extreme timescales for a while now due to large backlogs, mostly as they couldn’t cope with demand levels. However recently, we have noticed lenders bring down their timescales significantly, perhaps due to the decrease in purchase demand recently.

Why is this great news?

This is great news for us and our clients as reductions in lender timescales help property transactions. If all links of a chain are getting their mortgages faster this can help towards cutting down transaction delays.

Property sale fall throughs

The risk of property sale fall throughs will likely reduce as communication improves and errors in the application process are brought to everyone’s attention faster. This hopefully reduces the risk the financial loss associated with sale fall throughs and chains collapsing. We hope this quieter period also lets solicitors catch up with any backlogs.

A good starting point for 2023

This paves a good way into 2023. Hopefully, lenders will feel like they are able to be more competitive to get more business through the door. We have already seen more lenders offer more competitive products; Barclay’s recently released a competitive tracker product at 3.3%. Additionally, many lenders would have secured funding at cheaper rates than the bank of England base rate or swap rates right now and likely have the capacity to offer more competitive rates than they currently offer

It is not just lenders that are faster at doing business, we are also seeing this for valuers and surveyors, shaving off a lot of our time to do business and avoiding delays.

Why fixed rates are falling and how the next base rate announcement may impact this

Since the mini-budget, many lenders have been slowly reducing their fixed rates and re-introduced mortgage products. We have now started to see more rates below 5% enter the market, for both a 2- and 5-year fixed mortgage products. In our weekly recording of the best available residential rates, the best 2- and 5-year fixed are now around 4.65% and 4.60% respectively.

Is now a good time to fix a mortgage?

Some borrowers may find fixing their mortgage in the 4%s represent a good deal especially as there are always risks this downward trend does not continue. We have noticed more questions from new enquiries and existing clients whether now is the right time to take a fixed mortgage.

It is good to see so many lenders decrease their 2- and 5-year fixed rates. In recent months, lenders have been cautious to decrease rates too much so to not become inundated with applications, leaving the lender with the lowest rate unable to cope with demand levels.

How could the next MPC announcement impact mortgage rates?

In our view, there may be a minimal impact to fixed rates if the base rate increased by 0.5% or less. The lending environment appears to have settled after all the uncertainty and fear over the last two months as political events influenced market sentiments. Lenders are likely to have already priced in future anticipated rises to fixed rates. Perhaps lenders will be encouraged to reduce rates further if they continue to see the lending atmosphere settle down further.
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