Bank of England mortgage data March 2022

ended 03. May 2022

Tomorrow morning at 09:30, the Bank of England is publishing its latest Money & Credit report. It will provide mortgage approvals data for March 2022 and broader overall lending data. Handful of Qs:

  • Have you seen demand for mortgages drop off in recent months amid the cost of living crisis and/or rising interest rates?
  • How are you expecting demand to look like throughout the rest of 2022?
  • Lenders are upping their rates on an almost daily basis and tightening their criteria. Could this hit demand, or has it already?
  • How high do you think Bank rate could go by the end of 2022?
  • Which is the most active demographic in the mortgage market at present (FTBs, landlords, homemakers, etc)?

Any other thoughts, jot them down. But don't write War and Peace FFS.

5 responses from the Newspage community

"The acid test for mortgage demand is what happens to the housing market and broader economy. If, as seems likely, we go into recession later this year, and mortgage rates continue to increase, demand will invariably drop off. There's a possibility the Bank of England base rate could be raised by 0.5% to 1.25% on Thursday and I wouldn't be surprised if they are north of 2% by the year end. If house prices start falling, then all bets are off. Whilst we're still seeing healthy demand from company directors and contractors, we've not felt the full effects of recent hikes in interest rates, National Insurance and the energy cap yet."
"For now at least, lenders remain busy with the property market still thriving in most areas of the country. The desire to move home is always higher during the spring and summer months, and people are continuing to look for more outdoor space. The race for space is still ongoing. Stock levels for people selling properties and looking to buy are currently extremely low in many areas of the country and that is impacting the number of mortgages being taken out. A lot more people are looking at taking equity out of their properties to improve or extend their current homes. "Rising interest rates don't seem to have had an impact on the market quite yet but with criteria tightening and more stringent affordability restrictions imposed by lenders, this will have an impact on people’s budgets and ability to move home. Expect mortgage rates to continue rising until lenders start to see that the market has tailed off slightly. A lot of lenders seek to control the number of new applications they receive so that they can maintain reasonable service levels. The base rate rises have been marginal so far and I would expect at least three more increases this year to take the base rate to at least 1.5%."
"Remortgage business is the biggest hive of activity at present. People are scrambling to lock into the lowest rates possible and consolidate debt to clear their balance sheets before the inevitable recession hits us as squarely as Tyson Fury found Dillian Whyte's chin. For now at least, the property market is still strangely robust but rising rates, coupled with reduced affordability, will lower house price growth rates throughout the year. My view is that the Bank of England base rate will be circa 2% come December. As I have said repeatedly in recent months, Winter is coming."
"Demand for mortgages is still as high as ever due to many homeowners looking to remortgage and first-time buyers still desperate to get onto the housing ladder. Despite the considerable economic headwinds, demand for housing has shown no sign of slowing down yet but the market will be tested during 2022. The Bank of England base rate is likely to hit anywhere from 1.5% to 2% by December and that is likely to subdue demand. The most active segment of the market is first time buyers and home movers."
"Demand for mortgages is increasingly driven by remortgages as borrowers race to secure the best possible rates ahead of daily rate rises from mortgage lenders. First-time buyer interest is also strong as buyers seek bargains in a relatively slow market for city centre flats, with sellers made up of those seeking more space in the post-pandemic world, and landlords put off by increased regulation and higher taxes."