Are you wondering what’s happening in the mortgage market and how it will affect you? Our Managing Director, Monica Bradley, offers her expert insights to give you a better idea of what to expect.

The base rate went up on 23 March, and buyers are still looking for properties but offering less than the asking price. Renters are also having a tough time, with fewer rental properties available now. What does it all mean? Find out in our quick interview with Monica…

What does the recent base rate increase mean for the mortgage market?

The recent base rate increase was widely expected. There was some turbulence due to the events with banks; a lot of people wondered if the Bank of England would hold off on the increase, but in the immediate days beforehand, it seemed very likely there would be one.

Many people who have an interest rate deal lined up will likely find that things are either the same or perhaps a touch cheaper, so there’s not any bad news immediately after the rate rise.

Are we likely to see further base rate increases this year?

Predicting the future is tricky. We are likely to see a further increase, maybe just one. Many people within the market believe we will top out at 4.5%, but given the time between now and the next base rate review on 11 May, there will be a short reprieve.

After that, the market will likely wait to see what happens with inflation. Inflation is the main driver of these rate rises, and inflation remains high, so this will be on the Bank of England’s radar. However, the Bank of England predicts inflation will fall by the end of the year. If inflation falls quicker than expected, we might even see them reverse the rises we’ve seen over the last year or so, and we might see some small adjustments downwards, probably no sooner than this time next year.

The number of rental homes available has fallen by a third in the last 18 months. Is now a good time for more people to get onto the property ladder?

It’s been a really tough time for first-time buyers. They’ve had the double impact of house prices increasing significantly since the beginning of the pandemic but also the increase in the cost of borrowing.

Now, we’re seeing some real problems for potential tenants. Fewer properties are available, and rents are also rising, so there’s real pressure on tenants and first-time buyers.

We’re seeing first-time buyers enquire about their options, but there is a disconnect between asking prices and what people are prepared to offer.

What should people do if they need to remortgage this year and they’re worried about previous rate rises?

Reach out and speak to us, ideally six months before your current end date. If you have a fixed rate that ends on a specific date, get in touch before the six months. We can talk you through your options and tell you what will happen if you remain with your current lender and what will happen to your monthly payments if that’s the case.

There’s a big market of mortgage lenders out there. There are more than 100 lenders, and they want your business, so the market is getting more competitive now, and the cost of borrowing, despite what you’ve seen from the Bank of England, is either staying the same or getting a little bit cheaper. We’re here to help, and there’s no time like the present to have a chat.

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