mortgages
I am after news and comment about residential and buy-to-let mortgage lending.
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Interestingly, and perhaps unsurprisingly, we are seeing quite a few buy to let landlords reconsider their positions and opting to sell up rather than refinance.
With mortgage interest payments doubling or more, the profits from these investments just don't back out for them. This perhaps is the dream ticket for the supply chain, but can new borrowers afford mortgages with current market rates.
Those who are choosing to refinance are under pressure to increase rents, so I can see rent inflation rising rapidly over the coming 12 months.
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The mortgage market is exciting right now more product changes and withdrawals at the moment some with notice and some with no whatsoever; it's making everyone worth their salt to step up to the plate and be there for clients as there is not a lot that advisors or clients can do it's not a funding issue it's pricing one.
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Lenders do not have sufficient confidence in financial markets to price their products competitively. Most of the fixed rate mortgages available at the beginning of the week are no longer available. With political leaders declaring tax cuts to stimulate growth, and conversely the Bank of England increasing interest rates to halt spending, it's difficult to understand the logic. The result is a nightmare for mortgage brokers and potential borrowers, who are scrambling to lock in an available deal while all the rugs are being pulled from under their feet.
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Although we have seen lenders withdraw products this week, they are slowly bringing new products back in, at a much higher rate. The lenders still have an appetite to lend and it's now more important than ever for mortgage brokers to understand the implications this may have on customers looking to buy, especially with other household bills due to increase too. First time buyers may struggle in the current market, as increased rates are not being transferred to any savings accounts, so deposits will be harder to obtain and monthly payments will be very high. We really have to ask our customers that are on a tight budget, if now is the best time for them to buy.
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The news is currently making the public very worried. Yes we are seeing products withdrawn and yes we are seeing interest rates rising. The products we had last week were generally around 3%. Now we are seeing most of them around 5%. The increase isn't fantastic for our clients that we are helping with remortgages and new purchases, however we have been blessed with very low rates for a long time, and we knew one day an increase would come. The shock has been how quickly this has happened. This combined with other rising costs has non-surprisingly put the public on edge. However one thing we are finding frustrating is the amount of incorrect reports going out into the media. There are a lot of media outlets claiming mortgage offers have been pulled, it is extremely rare a lender would ever withdraw a mortgage offer - unless a clients circumstances have changed. In thirteen years I have only ever seen this happen once - this didn't happen even through Covid. Yes we are seeing rates withdrawn and repriced, the new rates are now higher - but Mortgages are definitely still available and looking back they are absolutely not the highest rates we have seen.
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Its chaos with rates getting pulled with no notice from some providers.
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It's chaos at the moment, lenders still wish to lend which is the fundamental point to remember. Some lenders are temporarily withdrawing all Residential and Buy to Let new business products, but they will be back once they have repriced their products. All lenders need to protect their position on their loan book, otherwise they will face a huge losses.