It’s been good news for those with mortgages over the last week or so, as rates have fallen sharply in as little as a few days, easing some of the pressure on customers that's been building over the past 18 months.
Indeed, the Financial Times reports that they expect rates to fall even further over the coming weeks, leaving many homeowners feeling more optimistic about their future prospects. This of course, would all be dependent on the Bank of England reducing their interest rates, which is not yet certain.
The FT’s report goes on to highlight the sharp decline in mortgages that have been registered since the peak of around 94k pm in mid 2021, to almost exactly half that figure in the middle of last year. Some of that can be explained by the post pandemic surge that inevitably ended in 2022, but the market has been in general decline since then as consumers’ spending has been squeezed ever tighter.
UK Finance predicts that whilst the lower mortgage rates are good news for most of us, the market will continue to be sluggish and the number of mortgages will contract even further throughout 2024. This is mainly due to the fact that the cost of living is still high and that the strain on household finances will take some time to recede.
So whilst the outlook is generally positive, the key message is to watch this space and don’t expect things to get back to normal any time soon. The worst might be over, but there is still uncertainty out there.
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