Welcome to the latest Mortgage Market update.
This time of year is always an intriguing one without the backdrop of the B-word, which we shall try not to mention ever again! Despite all of this, it was interesting to note was the Halifax House Price Index which reported that there was a bounce in December and predicts that prices would rise by around 4% in 2019.
The mortgage market has seen a strong start to the year, with new enquiries coming in thick and fast over a whole range of different types of people.
Remortgaging is still strong and will continue to be so as the gap between the rates borrowers can now get and the variable rate they revert to continues to get larger.
According to Moneyfacts, “in January 2017 the average two-year fixed rate deal was 2.31%. The average Standard Variable Rate has now risen to 4.90% in January 2019, an increase of 2.59% and the biggest gap in a decade.”
As we mentioned in The Financial Times this weekend, “Remortgaging has been a very strong part of the market for most of last year. That will continue, driven by uncertainty and people becoming more aware that rates are very low and that it’s a good time to do this sooner rather than later.”
First-time buyers also continue to be attracted to the property and mortgage market as the ultimate aim of owning a home shows no sign of diminishing. They are buoyed by the fact that lenders are actively targeting First Timers more effectively and consistently than they have done for some time. This is being backed up by some of the most competitive products we have seen at 90% and even 95% LTV for some time.
Lenders are also trying at least, to open up their criteria to be able to lend to more borrowers, especially those who are self-employed, work on a contract basis or who have had a credit blip.
It should also be mentioned that one of the other fallouts of this time of year is the sad fact that many decide this will be the last Christmas spent with a significant other. Separations and divorce lead to a great many questions around how the marital home is dealt with and the associated mortgage questions that go with it. At Coreco we have experience in dealing with this type of sensitive type of enquiry.
Mortgage rate wise things are still wildly competitive. For standard residential mortgages, borrowers can obtain 2-year fixes at 1.39%, (4.80% APRC) and 5-year fixes from 1.78%, (3.75% APRC) whilst variable tracker rates are around from 1.38%, (4.77% APRC).
Those looking at Buy-To-Let can still obtain products from just 1.44%, (4.44% APRC) for a 2-year tracker or 5-year fixes are available from 1.99% (4.06% APRC).