What can we expect to see in Mortgage Market in 2023?

I believe going into 2023 we will hopefully see more movement in the first time buyer market. With the end of help to buy - those stuck renting are crying out for a new scheme to help them onto the ladder. With the market starting to stabilise after a rocky few months, I hope that lenders will be confident enough to support buyers with attractive offerings. Buy to let is still a sticking point, and although stress rates are starting to ease, with changes ahead for landlords - they also need mortgage options to become more readily available. When stress rates rocketed recently, a lot of buy to let investors were stuck unable to remortgage - unless they increased rents. Whilst I think we will continue to see rents rise - the country needs good landlords. So rather than pushing them to sell, investing in property still needs to be attractive

Whether to buy a property now or wait will be the question on most people's minds. I expect it will be a fairly easy decision to wait, unless you have to move for personal or work reasons.

Property prices are already falling sharply. Even if there are no further increases in the Bank of England base rate, fixed rate mortgages are likely to remain two to three times what they were a year ago. Throw in a deep recession and prices have nowhere to go but down.

A house price crash 14 years in the making will be very welcome news for the young generation who, thanks to terrible policy decisions by the government, have been priced out of being able to afford their own home for far too long.

With the forecast being a 0.25% rise in February, if this happens I suspect that Q1-Q2 are going to be challenging as purchasers will still be looking for stability. The sooner we get a stable base and interest rates the sooner we will see an increased confidence in the market, I expect that to be Q3.
Another big topic which seems to be missed amongst all this is consumer duty and how that is going to have an impact on how brokers work next year.

2023 will see a few challenges I feel; affordability being the first, as lenders' affordability models have higher and higher costs factored in for staples such as energy and food, it will mean lower potential loans for any given income. A similar situation exists with buy-to-let, as landlords struggle to increase rents to keep pace with the requirements of lenders to pass their interest calculation ratio (ICR) tests. The next issue is potentially higher loan-to-value (LTV) loans; we tend to see lenders withdraw from smaller deposit mortgages when there is fear of house prices falling, this could be minimal and maybe it's just 5% deposit deals are at risk, but it could impact 10% deals too if prices fall further. That being said, the need for high-quality advice is greater than ever, so mortgage brokers will be in high demand.

I’m very positive. I think when the base rate rose in October we all predicted the worst, assuming lender rates would rise exponentially for the next few years however the last 2 months have shown that is not the case. Lenders have been slowly reducing their rates again and dropping their ICR calculations, almost all lenders that withdrew from the market are now back to lending. I have had many meetings with lenders since and it’s all been positive. Many hope to reduce their rates further when they bring out new products in 2023 and aim to reduce their ICR calculations further, which should help those delayed in remortgaging due to difficulty in raising rents.