Expert Insights on January Mortgage Approvals by Bank of England
The UK housing market is facing uncertain times ahead
According to the Bank of England’s Money & Credit report, mortgage approvals fell further in January, while the use of consumer credit has increased. This highlights that the UK’s housing market is facing uncertain times.
Fanny Snaith, a certified money coach from Cheltenham, suggests that the increased reliance on consumer credit indicates that things are getting tighter. With nearly everything increasing in price, people struggle to pay their bills and may be forced to use credit or start missing payments.
Vishal Vyas, a partner at London Mortgage Partners, suggests that there has been a sharp drop in demand for mortgages due to changes in the mortgage and housing landscape, base rate levels, and swap rates. He also anticipates that there will be more defaults in 2023, depending on the health of the job market and the wider economy.
Sofia Jones, the Managing Director at Penny House, suggests that January 2023 was a significantly slower start than last year. However, there was a noticeable increase in first-time buyers looking for mortgages in February. Product switching has been more popular for existing homeowners, especially for those looking to remortgage after speaking to a broker.
Craig Fish, the Managing Director at Lodestone, noted that January and February have been busy with inquiries but not written business, unlike last year when they experienced some of their busiest months. People are starting to experience “rate shock” and, sometimes, feel they can’t afford the increased monthly payments. Debt consolidation has become more popular as people try to alleviate some financial pain.
Related Facts:
– The average mortgage rate in the UK increased from 2.63% in January 2022 to 2.94% in January 2023 (Bank of England).
– UK house prices continued to rise in February, with the average house price reaching £251,697 (Nationwide).
– The UK government’s Help to Buy scheme is expected to be extended until 2025, supporting first-time buyers to get onto the property ladder (Homes & Property).
Key Takeaway:
The UK’s housing market is facing uncertain times ahead. As mortgage approvals fall and the use of consumer credit increases, people may struggle to keep up with their bills and may be forced to use credit or miss payments. However, there is still demand from first-time buyers and existing homeowners looking to switch products or remortgage.
In conclusion, the UK’s housing market is facing an uncertain future as interest rates increase and people struggle to keep up with rising prices. While there is still demand from some homebuyers and homeowners, there may be more defaults in the coming year if the job market and wider economy don’t improve.
