As a mortgage broker in Bexleyheath, we spend a lot of time looking at the property market and let’s take five minutes to cast out minds back two years…
It’s the start of 2021 and levels of COVID-19 is still high and we’re in the clutches of a third COVID-19 lockdown, however by 3rd February, the number of people receiving a vaccine dose in the UK had exceeded 10 million as the vaccine rollout continued at pace.
What of the property market? Well, annually house prices were on the rise with the Land Registry reporting an annual 7.7% increase to house prices across the UK in January 2021.
The stamp duty holiday, which started in July 2020 was due to end on 31st March 2021 and had really given a boost to buyer appetite for those looking to move home.
At the start of February 2021, Zoopla reported that the average time for an agreed sale to complete took 110-115 days on average, meaning that offers made on properties from late September 2020 onwards were likely to complete from early 2021 and if homeowners took out a two-year fixed deal, the fixed period would be ending from early 2023.
The challenge of increased mortgage rates
The challenge that homeowners in this position are facing is that whilst the value of their property is likely to have increased, the landscape when it comes to mortgage rates is completely different.
The 2021 census highlighted that the majority of fixed rate offers (or 57%) coming up for renewal in 2023 were fixed at interest rates below 2%. With the average two-year fixed deal being around 5% today, that’s a large jump in monthly payments added to already inflated outgoings due to the cost-of-living crisis.
If you take a look at the chart below, you will see how 2023 is predicted to have the highest value in remortgages for both residential and buy-to-let properties since 2016. That’s just over 10% higher than the last peak in 2019.
The value of a great mortgage broker
For those remortgaging in 2023, there is significant value in speaking with a mortgage broker rather than choosing one lender and going directly to them.
It could be the case that the deal your existing lender is offering will be the most competitive, but it’s also possible you could save by switching to a more competitive product.
Because mortgage brokers have access to a broad panel of lenders, they are able to assess the most suitable product for your individual situation and recommend one that is the best fit. This saves you doing the shopping around!
Not only this, but a mortgage broker will be there on the end of the phone to guide you through the application process and answer any questions you might have. They will also liaise with the lender on your behalf.
Does your fixed term end in 2023?
If your fixed term ends during 2023 and you’re looking for a mortgage broker in Bexleyheath, we’re here to help. Just drop us a call on 01322 553282 or contact us online.