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What Does 2022 Hold in Store for the Mortgage & Property Market?

10.01.22

Welcome to a shiny New Year and I hope you all have had a great break.

2022 looks as if it is going to be a very interesting one, with talk of rate rises and competition amongst lenders shaping the market.

Enquiry levels and activity seemed to remain high right up until Christmas as people looked to take advantage of low rates and had a lot of questions about what would happen going into a potential rising rate environment.

Given the extraordinary turmoil of the year in general, the mortgage and property market seemed to be in fine fettle, and we were pleased to report a record year, like many others in our industry.

This sets up what should be a strong start to 2022, which I expect to be another busy year in the mortgage and property world.

It could well prove to be a record year for remortgage activity with a huge number of borrowers coming to the end of their existing mortgage products who will be keen to fix in early to the lowest rates available.

Bank Base Rate

If Omicron continues to prove to be a milder strain and the economy continues to recover, we could well see another one or even two increases in bank base this year, although I do not believe this will be anything too dramatic despite the banks ongoing battle with inflation.

That said, if inflation does remain stubbornly high we may see another rise sooner than many expect with Bank Base Rate edging upwards towards 1% by the end of the year. It does seem that the days of seeing 5-year fixes below 1% are gone and we may not see their like again for a generation.

Lenders meanwhile will continue their competitive battles, with the top six banks still awash with cash to lend and new lenders determined to get a foothold and increase their market share. We will also continue to see lenders improve their criteria to appeal to more borrowers, who will also be helped if there is a general relaxation of the stress tests.

For those looking to buy, the issue will still be finding the property and saving the deposit rather than the mortgage itself.

House Prices

Whilst 2022 may not have the dramatic house price growth headlines of its predecessor, the general underlying trends remain in place. The last couple of years has given rise to even more pent-up demand from prospective buyers, keen to take advantage of low-interest rates and move to more suitable properties which are still in short supply.

Although a rise in interest rates and the general cost of living due to the energy crises may curtail some peoples plans, we will remain in a generally low-interest rate environment for the remainder of the year and this will not, therefore, be enough to cause house prices to fall dramatically.

Any growth in house prices in 2022 will however be more conservative in nature and rises and falls will vary regionally.

All of this means that 2022 represents another excellent opportunity for all of us in the property industry to keep busy and do what we do best, help people into the homes they need.

Wishing you all a healthy, happy and prosperous New Year.

Best Mortgage Rates

In terms of mortgage rates, for standard residential mortgages, borrowers can obtain 2-year fixes at 1.11% (3.30% APRC) and 5-year fixes from 1.36%, (3.30% APRC) whilst variable tracker rates are around from 0.99%, (3.30% APRC).

Those looking at Buy-To-Let can now obtain products from 0.99%, (4.40% APRC) for a 2-year fixed or 5-year fixes are available from 1.49% (3.70% APRC).

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