Mortgage Market Overview – April 2023

Published on 4 May 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 4.25% (Increase 0.25%)

Market Overview

With the contradictory effects of banks pushing interest rates down and inflation pulling in the other direction, market expectations of inflation dropping to under 10% saw a surprise inflation rate of 10.4%. Fuelled in the main by rising food costs, catching financial economists by surprise and leaving The Bank of England with little choice but to implement a rise of 0.25%.

The recent rate rises will take some time to filter through and have an effect, what the market needs now is a “period of calm” to let things settle, although market reports of one more rise being possible this year.

  • Swap rates seem to be stabilising leaving room for lenders to remain competitive and in turn consumer confidence is returning.
  • Economists still report expectations of inflation to start falling quickly in the second half of the year. (Zoopla)
  • Increase in the number of mortgage products below 4% which is a welcome relief for many mortgage borrowers.
  • The most competitive fixed rate deals are 3.98% for a two-year fix, 4.07% for a three-year, and 3.79% for a five-year. The best 10-year fixed rate deal is 4.05%.
  • Number of mortgage products increases, at the start of April there were 5,146 residential mortgage deals on the market, this number has climbed from 4,372 since the start of March 2023 (Moneyfacts)
  • The easing of interest rates has a positive impact on the average price of a UK home, increasing by 0.8 percentage points (Halifax)
  • Housing demand recovering with mortgage approvals rising to 33% which is below pre-Covid average in February which is up from 41% below in January.

Biggest challenges

  • ONS data updated on 1 April 2023 taking into account cost of living rises, continues to impact on Lender affordability.
  • Inflation uncertainty & Interest rate changes
  • The ongoing war in Ukraine

Mortgage News

  • Metro Bank relaunched 90% LTV which is also available for New Build houses and apartments. The professional product range offers up to 5.5 times income for fully qualified, registered and practicing professionals giving enhanced lending ability.
  • Leeds BS launch purchase only 95% LTV fixed rate at 5.55% with £250.00 cashback and free valuation (available from 21 April 2023)
  • Skipton BS exploring mortgages for long term renters – watch this space.
  • Many mortgage lenders are reviewing lending criteria for innovation as they look to increase market share.

Dates to be mindful of

  • Buyers continue to benefit from reduced stamp duty until 31st March 2025
  • Energy price guarantee extended for a further 3 months to June 2023
  • The next Bank rate decision will be taken on 11 May 2023.

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