Mortgage Market Overview – February 2023

Published on 1 February 2023

Stay up-to-date on the latest mortgage market trends and industry news with our monthly updates. Our team of expert advisors provides insightful analysis and expert commentary on a range of topics, including mortgage rate trends, housing market forecasts, and industry updates.

Bank of England Base Rate 4%

Here is our view of the mortgage market this month. 

  • Bank of England raised interest rates (2nd February 2023) by 0.5% to 4% 
  • Annual rate of inflation eased slightly, down to 10.5% which could ease the pressure on Bank of England future rises. 
  • Varying reports that base rate is nearing its peak and likely to land around 4.5% (forecasts are predicting a fall in the Bank of England rate later in the year)
  • The gap continues to shrink between Base rate tracker and Fixed mortgage rates, fixed rates continuing to fall with longer term fixed rates remaining the most competitive the average 2yr fixed 4.99%, 5yr 4.67% & 10yr 4.04% 
  • Mortgage lenders competing for business continues to drive down fixed rate mortgages. It is likely to be short-term and therefore fixed rates could increase from Q2 onwards. If rates increase, it will have an impact of affordability and max borrowing for cleints.
  • Stamp Duty threshold £250,000 at £0 remain place until 31st March 2025 – First time buyers pay £0 up to £425,000. 
  • Government support energy price cap ‘cheaper’ Energy Price Guarantee (EPG) annual bills limited to £2,500 until 31 March 2023, followed by £3,000 from 1 April 2023 for a further 12 months.

The next decision to be taken by the Bank’s Monetary Policy Committee (MPC) is scheduled for 23rd March 2023.

Why is inflation expected to fall?

  • The price of energy won’t continue to rise so quickly.
  • BOE doesn’t expect the price of imported goods to rise so fast.
  • BOE expects less demand for goods and services in the UK in turn prices won’t rise as quickly.

Green Shoots

  • Help to Buy extended the deadline for properties to be build complete from 31st January to 17th March 2023 Legal completion unchanged 31st March 2023 (Requests must be submitted by close of play Friday 3rd February 23)
  • Mortgage product availability rises to around 4000 products compared to 2,500 reported earlier in the year as the market continues to bounce back. 
  • Mortgage lenders continue to focus on supporting First time Buyers offering exclusive rates, cashback and innovative ways for parents and family to help them to onto the property ladder. 
  • Mortgage Works, Accord Mortgages and Gatehouse reduced Buy to Let products, more have followed. 
  • Most mortgage lenders will allow clients to swap interest rates before completion should a better rate become available. 
  • Virgin Money launched a 10-year fixed rate at 3.99% up to 75% loan to value it’s been a while since rates started with a 3!

Innovation Snapshot

  • Own New 95% mortgages now have the support of 30 lenders with a further 10 to join throughout 2023 to note only accessible via “selected mortgage brokers”!
  • Shared Ownership gains pace with lenders supporting 100% lending of the share (Kent Reliance). 
  • Green Mortgage products lender availability increasing, Halifax New Build only products 5yr fixed 4.60% – 5.20% (depending on loan to value) products offer a £250.00 cashback. 
  • Further detail around “Generation Home Deposit Booster” for New Build properties, friends and family can contribute up to 100% of the deposit this can be a gift or an equity loan “unique in the market”.
  • HBF New Homes Week 27th February to 3rd March celebrating the benefits of New Build Homes 

While another base-rate rise is unwelcome, more attention is being focused on two- and five-year fixed rate mortgages, which are falling. This will bring much-needed stability and confidence to the market and for clients looking to take on a mortgage. 

The team at 177 are available 7 days a week,  Monday – Friday 9.00 – 6.30 pm & Saturday & Sunday 10.00 – 5.00pm. Get in touch today on 0800 098 7177 or book a call back.

177 Mortgages and 177 Protect are open 7 days a week. We’re always happy to talk through your mortgage, specialist finance and protection needs in more detail. If you’d like to book an appointment or simply find out more information, please get in touch.

Request a Callback

Preferred date:
Preferred time:

Sign up to our newsletter

Sign up to our email newsletter to get the latest on 177 News, Advice, Mortgages, Protection and other services we provide.