The UK mortgage market has seen considerable changes over the past few years. There have been a number of reasons for this, including government policy and economic pressures.
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Mortgage rates
Over the past two years, the Bank of England’s base interest rate has increased from 0.1 per cent (December 2021) to 5.25 per cent (August 2023). This has meant mortgage rates have increased significantly over the same period.
As of November 2023, the average new five-year fixed mortgage rate stands at around 5.9 per cent.
Mortgage numbers
Bank of England data showed that just 43,300 house purchase mortgages and 20,600 remortgages were approved in September 2023. These figures are very low.
Lending multipliers
The amount that lenders are willing to lend for mortgages is based on salary. In the UK today, most lenders will lend between 4x and 4.5x annual earnings for single applicants and between 3x and 4x annual earnings for joint mortgages. This will vary based on the lender, the loan to value (LTV), and other factors.
Buying a new property?
If you are looking at buying a new property, whether to live in or rent out, it is important to get an idea of the condition of the property at an early stage in the process. A home buyers survey is an excellent way of doing this. There are plenty of specialist firms in this field that can provide advice, many with online resources. An example is https://www.samconveyancing.co.uk/homebuyers-survey.
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Housing market in general
Even though the housing market has been fairly sluggish over the past few years, there is still a general upward trend when it comes to the average price; what’s more, it is widely anticipated that the average price will continue to increase over the next five to ten years.
