The mortgage market was brought to bubbling point by mid-2014, but had, by the autumn, slowed to something more like a gentle simmer. The media diligently reported every twist and turn in the ‘will they, won’t they’ interest rate rise saga, which finally petered out as the year came to a close, leaving rates largely unchanged. ‘For sale’ boards made a comeback across the UK with the mortgage-market review, and buyers were out in force.
Even the introduction of more stringent lending controls in April 2014 failed to dampen the market by much. The changing market scenario was well illustrated by surveys conducted over the summer of 2014. The Royal Institution of Chartered Surveyors reported that 57% of respondents felt that it was a good time to sell and expected prices to rise by 4.75% over the next five years.
Even those who weren’t thinking of moving weren’t immune to the charms of a rising market; 42% of homeowners canvassed in a poll by property website Zoopla were looking to make home improvements. More worryingly, a Principality Building Society survey suggested that less than half the borrowers they asked knew what rate of mortgage interest they were currently paying.
Market demographics First-time buyer numbers reached a sevenyear peak in July 2014 with 30,000 securing their first mortgage loan. This sector remains active, with a whole generation of young buyers keen to make their move into home ownership. Many are tempted by 35 and 40-year mortgages. Figures from the Council of Mortgage Lenders showed that out of almost 80,000 first-timers in the second quarter of 2014, more than 22,000 took out mortgages exceeding 30 years, an increase of nearly 10 percent since 2010.
Those keen to jump up the housing ladder to a second home needed to find an extra £58,400, double the average first time buyer deposit. Perhaps because of rising equity in their existing property, only 37%, in a survey for Lloyds Bank, felt any concern about the size of deposit required. Retired homeowners were resorting to using their homes as cash machines.
The Equity Release Council reported that around £4 million a day was borrowed between July and September 2014. All the signs seem to indicate that lenders are still prepared to grant mortgages as long as borrowers can show they can readily afford them. So, whatever rung of the housing ladder you are currently on, a review with your adviser will help you find the best mortgage deal for your circumstances.
