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Bank of England Money & Credit Report - Jan 23

ended 01. March 2023

At 09:30 TODAY, the Bank of England is publishing its  Money & Credit report for January, which covers mortgage approvals and consumer borrowing. This report gets picked up widely by the media so if you'd like the chance to feature in the local, national and trade media, please answer any or all of the following questions:

  • How was the demand for mortgages in January in your experience (compared to December and January last year)?
  • Relative to January, did demand for mortgages strengthen or drop off in February?
  • Are you seeing more people struggle with their mortgage payments or other credit commitments?
  • Lenders have been increasing their credit impairment charges as they expect increased loan (mortgage, personal loan) defaults during 2023. Do you expect them to be proved right?

10 responses from the Newspage community

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Craig Fish
Director at Lodestone Mortgages
Both January and February have been busy with enquiries but not written business, unlike last year when we experienced some of our busiest months. It seems people want to hold off for as long as possible in anticipation of rates getting lower. People are starting to experience 'rate shock' and in some cases feel that they can't afford the increased monthly payments, so we are having to be creative to alleviate some of this pain. We are also seeing more interest in debt consolidation as people try to reduce their monthly outgoings as much as possible. That said, from an affordability point of view, on paper most people can afford the mortgage because the changes brought in post-Credit Crunch had lenders consider future rate increases, but of course, we are now facing increased costs in many areas, and this is where things are biting.
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Kylie-Ann Gatecliffe
Director at KAG Financial
We saw January kick off with a flurry of new buyers that has previously put the brakes on before Christmas. Year on year we did very similar business levels as there was also an increased appetite from remortgage clients wanting to look at their arrangements earlier than they usually would. We have seen an uplift in February compared to January, with even more first-time buyers and home movers now accepting the new norm of the current market. Generally speaking, over the past few years credit issues have become more common, but Covid had a lot to answer for with this even before the cost of living crisis. Credit impairment charges increasing is an obvious move in what is still a fragile time for homeowners and some will no doubt struggle, but as Spring approaches and hopefully inflation settles, I'm confident the market will too.
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Graham Cox
Director at Bridging Hub
February has seen increased mortgage demand compared to January, though that's to be expected anyway. With the recent headlines about mortgage rates falling, some confidence has returned.

The next few months will be interesting though. Swap rates are now edging back up, and there could yet be another base rate rise later this month.

The latest data also shows supply of property onto the market is far outstripping buyer enquiries (actual demand), and this disparity is likely to widen over the Spring months.
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Sofia Jones
Mortgage & Insurance Adviser at Penny House
January 2023 was a significantly slower start than the same month last year, as witnessed by the fact mortgage approvals continued to fall. February, however, has been a much busier month, with a noticeable increase in first-time buyers looking for mortgages. For existing homeowners, we have been arranging more product switches for clients to stay with their existing lenders this year, as opposed to remortgaging. This can be more suitable for those looking to remortgage after speaking to a broker. I have helped clients with their full affordability plan, after which they have been able often to save money on other credit commitments. Times are hard for many but I’m finding a review is proving very helpful.
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Luke Thompson
Director at PAB Wealth Management
January 2023 was better than we expected it to be and stronger than the mortgage market in December. But it was much quieter than January 2022. Most of our business at the start of this year had been mortgage renewals rather than new customers purchasing. February was definitely a more positive month than January for purchases and more along the lines of what we would expect to see for this time of year. Although we haven't seen more of our customers struggling to make their mortgage payments, there has been a definite tightening of belts in recent weeks and months as the impact of interest rates being much higher than this time last year, coupled with higher bills across the board, is being keenly felt.
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Vishal Vyas
Independent Mortgage Adviser at Private Finance
Demand in January 2023 was down sharply on the same month last year due to the vast changes in the mortgage and housing landscape, base rate levels and swap rates, all causing mortgage rates to increase.
However, demand didn't drop off a cliff and many started the new year with their goals and ambitions set, which usually includes buying a first home, moving up the ladder or purchasing an investment property. 2023 was no different in this respect. Demand in February was on a par with January, as more first-time buyers are looking to move forward to getting an AIP and making offers and trying to negotiate hard with estate agents. I believe we will see more defaults in 2023, depending on the job market and wider economy, especially as clients come off lower rates and move to newer products.
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Fanny Snaith
Owner at Fanny Snaith - Certified Money Coach
Things are definitely getting tighter as shown by the increased reliance on consumer credit in January. How can they not with pretty much everything going up in price? When people cannot afford to pay their bills, they first cut back and, after that, if they still can't pay their bills, they either use credit or start to miss payments. There are tough times ahead.
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Rob Gill
Managing Director at Altura Mortgage Finance
While January started slowly, mortgage enquiries picked up strongly from the middle of the month and this continued into February. A potent mix of buyers taking advantage of a slower market and remortgage borrowers keen to mitigate against rising interest rates by securing the best deal possible has created a sweet spot for certain sectors of the mortgage market.
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Gary Boakes
Director at Verve Financial
January was quiet as shown in the mortgage approvals data but February has been a busy month, with more people out looking for properties. However, the levels are way off what we were seeing this time last year. There is still a steady stream of people looking at remortgaging as expected with what is expected to be a record year for remortgages in 2023, the increase in mortgages payments has now been met with an 'it-is-what-it-is' approach as people realise we will try to keep the payments as low as we can but ultimately we can't magic sub-2% rates any more. The longer this goes on, the more people will understand this could be the new normal.
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David Conway
Director at Clayhall Financial Services Ltd
Buyers all but vanished from the housing market in November and December. Remortgages were up as borrowers grabbed rates appearing to be on sale. This
is in stark contrast to the end of 2021 as lockdowns were ending and pent-up demand (supported by Help To Buy) ensured the flow of property transactions was steady and increasing. In 2023 there are shoots of recovery but still well down on last year. Developers report little activity for new builds, and the near collapse of Purple Bricks in the second-hand market shows how uncertain the future looks in the housing market.

Most borrowers have been on fixed rates and how prepared they are for when that rate ends will determine how widespread credit issues become ut make no mistake, we are at a significant risk point and there will be substantial lifestyle changes needed.