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This is our take on what is currently happening in the mortgage market. Our views are often cited in several national publications, including; BBC News, The Times, Telegraph, City AM, 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.
Is inflation and rising energy prices going to lead to much needed housing stock coming to the market?
The UK is experiencing a cost-of-living crisis; inflation is at record levels and set to surpass 7% by April, the energy price cap set to be increased in April with 18 million plus households set to pay on average £693 or 54% more and all the while wages are stagnating. House prices however are at record highs and this unique situation presents a dilemma for many homeowners, especially those in the older demographic, who may consequently look to sell in the coming weeks and months. The costs of downsizing were a prohibitive factor for many older homeowners, but with pensions and incomes not rising anywhere near in line with inflation and potentially larger and older houses costing significantly more to heat and run this could push people to put their houses on the market where they otherwise would not have. Good news for those who have been in housing limbo who sold their property during the pandemic and have been unable to find one to purchase.
First-time buyers less London centric
While a number of major employers have publicly announced a return to the office, the situation is more nuanced and for now most employers are still offering a degree of flexibility for their employees and a hybridised working model. It is this flexibility that is leading to First-Time Buyers and young professionals considering options much further afield than before and notably in other urban areas as opposed to the much-publicised countryside race for space, as while these young professionals often have London salaries and are well remunerated, but still priced out of the Capital. For instance, we have had clients who fit this demographic buying in Manchester, Norwich, Birmingham, and Coventry in January.
Borrower affordability to be constricted by rising cost of living
Lender’s affordability calculators are in part defined by data from the ONS (Office for National Statistics) and once this data reflects the rising costs of living, especially post-the removal of the energy price cap in April we can expect that this will mean tighter affordability for some and lower loan amounts available than previous.