Are Rates Starting to Slow Down?

Hello! Steve here!

How are the lending markets looking at the moment and are rates starting to slow down?

Over these last couple of months, we have mentioned interest rates and lender’s appetite in the market more than once.

This is important right now because there are a lot of concerned people who may have had their plans halted due to fear and panic in the media.

There are also plenty of people who are reconsidering their approach to property investing!

Recently the markets had 6 – 6.5% priced in for the peak of the Bank of England rate in 2023. This was after the mini budget caused turmoil in the markets. Lender’s rates were removed, and for a time there was no products for a lot of banks.

When they were reintroduced,?the fixed rates were a lot higher because the swap rates (the rates at which lenders borrow money) had increased significantly. It has been the first time I have witnessed 2-year?fixed rates being higher than 5-year fixed rates which is very telling.

Since then,?things have settled down. Some rates are now coming down again.

After the rate hike during the first week of November when the base rate went from 2.25% to 3%, HSBC’s economic advisors revised their outlook for where interest rates are expected to go. This is very interesting because after only a month or so of panic they now have 3.75% priced in for the peak of next year. They are predicting a 0.5% rise in December followed by a 0.25% rise in January.

HSBC have also stated that they expect lenders to become more competitive as service levels return to normal. During 2022 we have witnessed the time taken for lenders to process applications increase dramatically at times. Some lenders taking a month to assess a piece of documentation before giving comments. If more information was needed, this was requested and submitted, taking a further month to get assessed! With there being so much uncertainty during 2022,?products being removed,?and new ones introduced, it has caused carnage at times. With stronger leadership and more stability comes greater certainty and confidence. This is essential for us to have a thriving financial and property market. Lenders can price their mortgages better and there should be less changes with mortgage products too. All these things help reduce service times and more clients get back looking to either change their mortgage, move house or invest in property.

HSBC have also stated inflation will drop sharply next year leading to a potential cut in the Base Rate later in the year.

So that's how HSBC see things going over the next few months.

Don't forget that this is just their outlook and is not advice however, it does give us all more confidence going into 2023 don't you think?

No matter what your requirement... First Time Buyer, Home Mover, Remortgage, Buy to Let, Bridging and Development... We have got you covered with specialists in every department to make sure that you get the best advice and the most comprehensive?and competitive deal possible.

To discuss your options, please?reach out to the team here and see how we can help.

We look forward to hearing from you!

All the best,

Steve

Express Mortgages is a trade name of Express Mortgage Services Ltd. Express Mortgage Services Ltd is authorised and regulated by the Financial Conduct Authority. [Reg No: 474427] Company registered in England & Wales no. 05167662

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