Mortgage Market Overview – January 2023

Published on 4 January 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 3.5%

As we say goodbye to 2022 and look forward to the New Year, here’s an early snapshot of what the mortgage market has in store for us in 2023. 

  • The Bank of England raised interest rates on 15 December from 3.0% to 3.5%. the 9th rise since December 2021.
  • The market began to settle towards the end of 2022 with a slight fall in inflation, to 10.7%. This could ease pressure on further base rate rises. 
  • Mortgage interest rates continue to reduce. Whilst a return to the low-interest rates we saw in early 2022 is unlikely, is this the new normal?
  • Swap rates are settling making longer-term fix rates more competitive. The average 2yr 5.17%, 5yr 4.85% & 10yr 4.04% 
  • Stamp Duty threshold £250,000 at £0 remains in place until 31st March 2025 – First time buyers pay £0 up to £425,000. 

The next decision to be taken by the Bank’s Monetary Policy Committee (MPC) is scheduled for 2 February 2023.

Green Shoots

  • Government announced a further extension to the mortgage guarantee scheme (95% lending) until the end of 2023 (not available for New Build but helps indirectly with the second-hand market). 
  • Armed forces Help to Buy scheme has been made permanent. 
  • Lloyds Banking Group (Halifax & Scottish Widows) no longer require an EWS1 for properties in England. 
  • Help to Buy practical completion deadline (first longstop date) extended to 31st January 2023 (must have ATP or ATE in place) Final completions 31st March 2023 (with no further extensions).
  • Lender support for shared ownership mortgages gains pace, with increased support at 95% for houses and apartments.
  • Government launches Right to shared ownership giving tenants the ability to purchase shares between 10-75%.

Innovation Snapshot

  • Own New – giving developer and client access to 95% mortgage deals with high street lenders picking up traction – Only available via ‘selected brokers’.
  • First Homes – the scheme offers a discount to first-time buyers & Key Workers. It’s only available for New Build (England only).
  • Deposit Unlock – available for new build properties giving clients access to 95% mortgages.
  • Green Mortgage products – lender availability increasing – Halifax 5yr fixed 4.79% – 5.29% (depending on loan to value).
  • Generation Home launched Deposit Booster – Gifted deposit either as a deposit loan or equity loan available to clients purchasing New Build properties.
  • Coventry Building Society are supporting New Build houses 90% LTV will accept incentives to 10% with a client deposit of 5% (Max LTV 75% apartment).

There is no doubt that 2023 will have its challenges with the war in Ukraine, the cost of living and household incomes being stretched. But that said, lenders still have an appetite to lend and targets to hit, as the above shows lenders and privately funded companies look at innovative ways to help build momentum. Now more than ever, it’s a great idea to have a mortgage broker to help navigate the way through to home ownership in 2023. 

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.