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Deal or No Deal, Mortgage Rates Remain Low.

29.07.19

It’s Boris! Yes, we all knew that would be the case and so begins the fun and games as he builds a cabinet that at least threatens to use a no-deal Brexit scenario, although many believe this is just one big bluff.

What this change around also means is we have yet another Housing Minister. It is so difficult to get any consistency when you are changing around the people responsible for Housing Policy so we will see what the new incumbents come up with and hope they have time to follow through.

Many people will be keen to see if there are indeed any policy changes that could improve their position under Boris Johnson, especially in relation to stamp duty.

In the mortgage market, we are just about to go into the summer period where lenders tend not to make many announcements and leave rates pretty much as they are. Saying that we have seen a couple reduce rates further, with HSBC coming back to the fore with their latest reductions.

Meanwhile, UK Finance published their June Household Finance data last week. The uptick in the number of mortgages approved for home purchase compared to June last year shows the market has been holding up despite the political backdrop.

There was clearly a lot less confidence in the first quarter, as last week’s HMRC data showed home sales in June were down by 16.5% compared to last year, but the UK’s economic fundamentals remain strong.

We expect to see a pick-up in remortgage activity in August and September given that the likelihood of a no-deal exit from the EU has now ramped up significantly. People are bracing themselves for a period of potentially strong turbulence and locking into the lowest mortgage rates possible provides vital protection.

With so many unknowns in play, some will choose to sit tight during the next two to three months, but I still believe this could be an expensive decision if the market rebounds as no-deal proves to be not such a big deal after all, or indeed there is a deal to be done.

Rate wise, for standard residential mortgages, borrowers can obtain 2-year fixes at 1.31%, (3.77% APRC) and 5-year fixes from 1.71%, (3.29% APRC) whilst variable tracker rates are around from 1.29%, (3.82% APRC).

Those looking at Buy-To-Let can still obtain products from just 1.41%, (4.86% APRC) for 2-year fixed or 5-year fixes are available from 1.89% (3.73% APRC).

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