With mortgage rates being cut and buyer inquiries up, there’s renewed optimism in the housing market — but how long can it last?
David Wise, founder of Fitch & Fitch, along with other industry professionals, shares his comments in the Financial Times:
“Since Liz Truss’s economics unlike the financial crash in 2008 there has not been an issue with liquidity or lenders appetite to lend on high-end mortgages, albeit at a price.
We’ve found clients looking for the larger loan were hesitant to lock in a fixed rate position at what could be deemed peak rate in the current cycle, and favoured a floating rate, like tracker rate, or a blended approach where part the loan was floating and the part fixed, therefore allowing them to benefit from any potential bank base rate falls.
Since the Bank Base Rate was cut to 5%, although the market had priced in such a move, it has provided lenders the confidence to improve their offerings, especially since the SWAP market, which influences mortgage costs, has continued to improve. Consequently, we’ve observed a shift in sentiment where clients are now considering fixed-rate positions, especially as rates become more competitive, with HSBC now pricing a 5-year fixed rate from 3.81% at 60%ltv for loans up to £5m (Correct on 24.08.2024).
Markets can change quickly, as we have recently seen, and second-guessing where rates are heading remains a dangerous game. With the return of sub-4% fixed-rate, clients are seriously considering whether now is the time to lock in a 5-year fixed rate. Of course, you only ever know if you’ve made the right decision when you look back.”
You can read the full article in the Financial Times. Give yourself the best chance at securing the right mortgage by consulting our highly experienced team today at 0207 859 4098—your partner every step of the way.