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The mini Budget - a year on

Journalist: Shekina Tuahene, Mortgage Solutions

ended 19. September 2023

Hi, I am working on an article about where the market stands a year after the mini Budget (22 Sept).

Much of the damage appears to have since been corrected, due in part to the subsequent Chancellor Jeremy Hunt undoing many of the policies introduced by his predecessor Kwasi Kwarteng.

  • A year on, what is your opinion on the current state of the market?  
  • How much of the market's current position is a direct result of the mini Budget?
  • Do you think the market was already headed in this direction, considering the rising cost of living and inflation?
  • What did you do to help your business cope with the market changes?
  • What have you learned from the event?

5 responses from the Newspage community

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Editor
Stephen Perkins
Managing Director at Yellow Brick Mortgages
The economy is still suffering from the ill-fated mini-budget. Whilst inflation was still going to cause increased mortgage rates, from the Bank of England's reckless base-rate rises, it seems that the Bank of England saw the economy on the floor and decided to continue kicking it.
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Elliott Culley
Director at Switch Mortgage Finance
To blame solely the mini-budget for the current state of the market would be unfair. Interest rates had started to tick upward and the main contribution of the mini-budget was to accelerate the speed of the rate increases. Inflation was mainly caused by the spending during covid as well as the war in Ukraine. We are still feeling the effects of this today and will do so for the rest of 2023 as well as some of 2024. Mortgage holders have proved resilient to the changes and hopefully, more will now keep on top of their finances as a certain few have been stung by being reactive rather than proactive.
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Steven Hargreaves
Mortgage and Protection Adviser at The Mortgage Co
We all knew the housing market could not continue increasing at the same rate year after year, however, nobody forecasted the speed of the changes, less than a week after the mini-budget.
Since Lizz Truss's budget 12 months ago, it has been challenging, with many lenders changing rates and criteria with little or no notice, which is frustrating.
We have worked closer than ever with existing clients, arranging remortgages/product transfers much earlier than we have ever done in the past, as rates have dropped amending these weekly, ensuring clients are on the best rates and mitigating increases where possible.
The purchase market is still been severely squeezed, the importance of having an existing client bank has never been so important, and ensuring you provide those clients value for money and transparency is essential.
The only constant in this business is change, and we do not see an end to it any time soon!

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Alastair Hoyne
CEO, Finanze Capital at Finanze Capital
It does not feel like a whole year ago that the whole mini budget malarkey happened, it still feels fresh in the mind as a memory of traumatic financial times. To say this was a stressful time is putting it lightly. Rates were being pulled out from beneath us daily as many lenders withdrew their products with no notice at all. We were trying desperately to get clients applications in to lenders to lock in the rates before any further sudden rate rises or total withdrawals. At first clients were wanting to lock the rates in for 5 years as rates were historically low and we knew they would not be this low again in quite some time however as the base rate rose and rose I found clients became- and still are- more keen now on a 2 year fixed, optimistic that rates may drop in the coming 2 years.
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Amit Patel
Adviser at Trinity Finance
What planet is Liz Truss living on? The audacity to say she regrets nothing from her brief time as PM beggars belief, at no point did she apologize for her failings whilst in office instead tried to defend the indefensible. The facts speak for themselves the pound fell to a record low against the dollar, inflation soared to a 41-year high of 11.1%, and the Bank of England also hiked interest rates to compensate. An ill-thought-out policy has had huge implications on the lives of millions of people.