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Are expiring mortgages pushing the housing market down?

Journalist: Marc Shoffman, Freelance

ended 15. June 2023

I am looking to assess how much the mortgage market is driving asking prices and offers for an i newspaper story.

I am keen to hear from estate agents and mortgage brokers on:

Are you seeing any pressure from homebuyers to get their mortgage offer extended

Are you seeing an increase in mortgage offers expiring?

Are sellers with lower rate mortgage offers keen to sell before they expire, is that driving lower asking prices or a willingness to accept lower offers?

What type of offers are coming in and at what discounts are sales being agreed?

Are buyers using this to knowledge to make lower offers or are they also driven by their own mortgage offers expiring soon so are they willing to pay more so they can make use of a lower rate mortgage?

A case study of a borrower going through this would also be great!

4 responses from the Newspage community

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Editor
Rohit Kohli
Director at The Mortgage Stop
Where clients have already got mortgage offers in place, other than for issues with the chain, we haven't had any extension requests. I think it's too early to see people doing this but expect more in the coming weeks. We are starting to see more clients come to us who have had offers accepted under the asking price (anywhere between 5% to 10%) so we're seeing downward movement start to appear and more often properties are taking longer to sell. We are seeing more clients taking the "wait and see approach" - there is the demand to buy still out there but people want to see what happens over the coming weeks in the hope that either rate stabilises or prices reduce.
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Jamie Elvin
Director at Strive Mortgages
We haven't seen an increase in expiring mortgage offers compared to previous boom periods. The increased rates have softened the market and allowed more time for conveyances, resulting in fewer offers expiring than before. However, in cases where there are complications or chain breakdowns, there is inevitably a rush and increased pressure to secure a new deal because the consequences of not extending them can lead to the collapse of a sale or price renegotiation. We have noticed an increasing number of sellers accepting reduced prices to avoid lengthy periods on the standard variable rate, which can be as high as 10% in some cases. Many savvy home movers may realize that they will potentially accept a lower price for their home, but if they are buying, this may be relative, and they can leverage the market conditions that are affecting their sale to their advantage in the purchase.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
We're not seeing the real impact of higher rates on house prices yet. Yes, we have a few clients out there trying to lowball would-be sellers but they're having very little luck with it and are just missing out to buyers paying closer to asking prices.
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James Vince
Managing Director at Castle View Finance
Savvy buyers are using bridging and cash to support keen purchase prices, especially where sellers are motivated. There has been a reported slowdown in the mid-high housing range (the £500,000 bracket in the North West, for example), possibly due to downsizing to help the cost of living leaving a reduction of buyers in the slightly higher Loan to Income price bracket. The pressure when an offer is accepted to support with a DIP / AIP and completion timescale has increased, but we believe this is more to do with certainty in the chain and onward seller activity.