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Applications rolling in despite the sweltering heatwave

21.07.22

Welcome to another week of wonder in our fine industry.

It certainly has been an interesting one as we swelter in the heat that swarms around us, but there is no let-up in the housing and mortgage market!

Mortgage lenders are still finding themselves trying to stem the tide of applications that are coming in, and so despite the fact that SWAP rates actually eased off in the last couple of weeks, we have still seen lenders increasing some rates.

What is interesting, and somewhat counter-intuitive, is that the best Buy to Let fixed rates are now as good or better as the rates for standard residential properties. That tells you where lenders see the most demand at present.

As I write we are about to hear the Bank of England Governor, Andrew Bailey, do his annual Mansion House speech, and all ears will be on any hints given around the future path of interest rates. There is a lot of speculation that the next move on 4th August will be a half point jump, but he has already indicated that this is not nailed on.

Inflation now stands at a 40 year high of 9.1% and it could well reach 11% once the next round of energy price rises filters through, but he has already suggested that some of the issues appear to be easing. It does seem that a rise will happen though, and they may stick to their policy of 0.25% rises up to now. If you’re wondering how this affects your mortgage take a look at our handy guide.

Given the fact that completions are taking longer than usual, it was interesting to see that Santander have temporarily granted everyone an automatic one-month extension on any mortgage offers close to expiry. This shows that they also recognise the issues in the system and are keen to make sure that people do not have the difficult scenario of having to apply again on a delayed purchase only to be hit by a new much higher rate.

As we enter the traditionally slower summer period, this will allow lenders to catch up and we could then see the return of the “Summer Sizzler” as they actually reduce rates once more to get applications back in, especially if the cost of funds continues to stabilise and maybe even drop a tad.

Those borrowers who are using a broker with their eye on the market may well be able to benefit from this if it happens.

Either way, for the first time in a while it is difficult to predict what happens next. Rest assured we have our fingers on the pulse and will report here.

Have a great week! 😊

Best Mortgage Rates

In terms of mortgage rates, for standard residential mortgages, borrowers can obtain 2-year fixes at 2.63% (4.10% APRC) and 5-year fixes from 2.85%, (3.80% APRC), whilst variable tracker rates are around from 2.00%, (3.30% APRC).

Those looking at Buy-To-Let can now obtain products from 1.89%, (4.80% APRC) for a 2-year tracker or 5-year fixes are available from 2.97% (3.20% APRC).

 

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