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Mortgage market February

It’s time for some Optimism

Rocky times seem to have hit the UK economy over recent years and the newspapers have been full of financial woes, but some experts are starting to once again give a positive outlook. Disruptions such as Covid, Brexit, and the failure of supply chains may still be having a negative effect, but overall businesses and property owners can remain confident as we still have the lowest unemployment in decade – so if we are in a recession then it’s a fully employed one.

A leading international bank is suggesting that despite the pandemic and the consequences of the war in Ukraine there are many positive signs that suggest the worst is behind us financially and as such a return to some stability is expected.

Some take out from a recent webinar from a leading expert suggest that;

  • The UK is unlikely to avoid a recession, but the expectation is that this will be a 'mild recession'.
  • The employment market is broadly good.
  • Inflation has most likely peaked (end of 2022).
  • Falling energy prices will drive inflation lower.
  • Inflation will come down slowly.
  • The bank base rate will possibly increase to 4.5% but then it should stabilise. 
  • Overall, the outlook is not gloomy, in fact it's quite positive. 

What does this mean for businesses and the mortgage market?

Businesses can start to be a bit more optimistic about the future. Consumer spending increases and a reduction of overhead costs associated with office space rental should all contribute towards improved bottom lines. 

Wages are also likely to rise, which allows families to gain some financial stability by saving more money for larger purchases such as homes. Also mortgage rates, whilst perhaps not returning to the unsustainable lows of the last couple of years, are expected to stay in the low 4%’s this year and perhaps hit mid 3^%’s in early 2024.  Whilst we would all love to see the 1% 's and 2%’s again, in truth they were never there for the long term and I think a Fixed Rate mortgage starting with a 3% figure is not only sustainable for the long term, but is very attractive to the buyer.

In Conclusion;

Maybe it’s time for some optimism.  We still have the lowest unemployment in decades, wages are rising and energy costs are coming down. Mortgage rates have stabilised and we are already seeing Fixed rates starting with 4% and we expect a headline 3% within the next 12-24 months. So perhaps there remain some challenges ahead, but at the end of the tunnel there is definitely light peeking through - read our spring mortgage market update and find out where we're at.

Rob Starr

CEO – Crunch Mortgages

Crunch offers a whole of market mortgage brokerage service that has been assisting self-employed individuals secure borrowing on all their property needs since 1991. A whole of market broker like crunch mortgages gives you access to all the very best Fixed Rate deals including those not on comparison sites or the high street. 

Simply talk to Crunch Mortgages today to see what’s possible on 0333 311 0800 and we can get the rate that is most suitable for you, or check out our other mortgage advice articles for all the best tips.

Speak to us today for more specialist mortgage advice, or take a look at some of our helpful resources including our expert guide on mortgages for contractors and self-employed professionals. Alternatively, get the answers you're looking for from our ask an accountant service, with pricing plan information available online.

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Rob Starr
CEO of Crunch Mortgages, operated by SEICO
Updated on
June 15, 2023

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