BoE Money and Credit Oct 22

I believe there will be a significant number that will turn to short-term finance, such as credit cards, to get through the festive period, and to buy some time to adjust household budgets in the new year. Given more challenging affordability checks, the ability to raise extra funds through remortgaging will reduce, which will mean an upturn in Secured Loan lending. Stretching the borrowing over a much longer term will make it more affordable, and I think that will be the focus for most - what do I pay every month? Demand for mortgages in October and November has been significantly reduced - those looking to purchase property, and Buy to Let Landlords, are quietly sitting and watching the market, as it looks to settle down before any commitment is made. We will see this trend for the rest of the year, as we look at the cost of everything in our lives, not just property expenses.

Zoopla have confirmed what we all really knew, demand has fallen 44% since the mini budget. Not to lay all the blame at Truss and Kwarteng's door, but this certainly was the catalyst the an abruptly stalling housing market. A combination of rising interest rates, higher taxes and lack of confidence has killed off any confidence in housing for the rest of the winter. Prices should fall around 20% and bottom out late Spring. This is when the Bank of England will realise and reverse the terrible policy decision of raising interest rates too far and holding them for too long whilst the economy crumbles. Rates will come down and confidence will return. All the Bank of England is doing by pursuing the policy is inflicting pain on millions of home owners and, indirectly, renters. It has no impact on imported inflation. The massive rise in unsecured debt is expected at a time of economic pain. What is unusual is that this is also a time of increasing rates so this will mean those who can least afford it will be hit hardest. With increasing debt, rising rates, a worsening economy and energy bills to make your eyes water we really do need a government who can intervene to protect those on the lowest incomes. Unfortunately we seem to have one that increases the burden on working people rather than alleviate it.

As a business we've seen an increase in customers looking to take early advice on their existing mortgages. Many worry about the inevitable increase they face in their mortgage payments when their fixed rate is up and so are looking to secure a rate as early as possible to limit the impact on their finances. We're seeing customer mainly looking for longer term fixed rates to give security although there is an increasing appetite to look at trackers and discounted rates, with customers expecting rates to level off or even decrease in the medium term. When we look at the other side of our business, the purchase or home mover market, we have seen new enquires from customers decrease by around 50%, inline with data released today from Zoopla. My belief is that this is the normal market for us, rather than the red hot property market we have almost become a custom to over the past 36 months or so.