The UK mortgage market will remain robust in 2023 with interest rates lower than previously thought, Capricorn Financial Consultancy believes.
According to the company, gross mortgage lending is now back to pre-pandemic levels, which is “a testament to the competitiveness of the UK market”.
The firm said the mortgage landscape was “very active, with banks keen to lend, given excess liquidity”. With its expectation of lower-than-predicted interest rates, Capricorn added that “many mortgage lenders are pricing fixed-term mortgages slightly lower accordingly”.
However, while Capricorn’s predictions state the UK is nearing a rates peak, the firm believes that rates will continue to fluctuate over the next few years as economic turbulence persists.
Demand for housing in the UK continuing to outstrip supply will fuel ongoing house price inflation in the coming year, Capricorn said. However, the company noted that, while demand for London properties softened during the pandemic due to high numbers of people deciding to live and work remotely, in the second half of 2022 the trend reversed and demand for London housing “significantly increased” as the working population migrated back to the capital.
Capricorn predicted, that moving forward, there will be continued demand for mortgages in the UK and London. However, less predictable rates will create a highly competitive market, with supply often failing to meet demand.
“As we adjust to the new normal of higher rates, it is important to note that rates are still not high in comparison to historic averages, and there are a vast number of choice for those seeking mortgage options,” said Jeremy Law, chief commercial officer of Capricorn Financial Consultancy.
“Many of our clients are still opting for a fixed mortgage because they appreciate the certainty of knowing how much their monthly bills are likely to be. Tracker mortgages are also proving popular at present, as, in many cases, they offer lower rates than fixed-rate mortgages,” Law added.
Full Article: https://propertyindustryeye.com/mortgage-interest-rates-will-be-lower-than-previously-thought/