Mortgages: the new normal?
You may be aware of the oft-quoted curse ‘may you live in interesting times.’ Thankfully, it appears the curse is apocryphal and that no concrete source can be cited for its origin.
However, despite that fact, its cautionary meaning has certainly rung true for mortgage borrowers recently. The tales emerging from households facing stark increases in mortgage repayments have been anything but apocryphal. They have been very real indeed.
Over the last four or so years we have emerged from a global pandemic which led to emergency rate cuts in March 2020 and ultimately was a precursor to an inflationary crisis that began in 2022 and is only now beginning to subside. Throw into this mix a disastrous mini-budget in the UK in September 2022 and there has been plenty to keep us all occupied.
All these factors and the threat of spiralling inflation compelled the Bank of England to take remedial action by pushing base rate to 5.25% in August 2023 – a high not seen since February 2008 – and hold it there for a year.
It’s only recently, with jitters emerging around the stalling UK economy and inflation returning towards its target, that the Monetary Policy Committee has relented and made a trim to base rate to start easing financial pressures on UK homeowners. Many households will be hoping that there will be more cuts to come.
Clearly the mortgage market is living in interesting times. The era of rock-bottom rates appears to be over and as the dust settles on this period of great upheaval the question now is: what will be the new normal for the mortgage market?
To answer that question, we have assembled a panel of esteemed mortgage experts drawn from mainstream and specialist lending as well as the broker space to talk about the trajectory for interest rates, and what this means for the market in terms of borrower eligibility, forbearance, product innovation, housebuilding, and house prices.
Our panel features:
We’d love for you to read our report by clicking here.