Looking ahead to the new year for the mortgage market, some advisers have argued a house price crash will be a good thing, while many are in agreement that greater support is needed for first-time buyers.
Speaking to FTAdviser, mortgage brokers and advisers shared their thoughts on the year that was and the year ahead.
There is a tentative hopefulness among some that things will improve for first-time buyers in the new year if house prices fall as predicted, but others argue that a deeper crash is on the horizon.
Graham Cox, director at Self Employed Mortgage Hub told FTAdviser that prices are already beginning to fall and even without further increases in the Bank of England base rate, fixed rate mortgages are likely to remain elevated.
“Throw in a deep recession and prices have nowhere to go but down,” Cox said.
“A house price crash 14 years in the making will be very welcome news for the young generation who, thanks to terrible policy decisions by the government, have been priced out of being able to afford their own home for far too long.”
He added: “Whether to buy a property now or wait will be the question on most people's minds. I expect it will be a fairly easy decision to wait, unless you have to move for personal or work reasons.”
Estimates on where house prices will go over the next two years vary.
Last week (December 16), Halifax said it expected house prices to fall by 8 per cent on average next year due to higher mortgage rates and tightened affordability.
This came after the Bank of England increased interest rates by 0.5 percentage points to 3.5 per cent.
Mortgage rates increased sharply in the second half of 2022, with average two-year fixed mortgage rates currently sitting at 5.84 per cent, while average five-year fixed mortgage deals sit at 5.67 per cent, according to Moneyfacts.
First-time buyers "crying out" for new scheme
Kylie-Ann Gatecliffe, director at KAG Financial told FTAdviser she is hopeful that the first-time buyer market will see more movement in 2023.
“With the end of help-to-buy, those stuck renting are crying out for a new scheme to help them onto the ladder.
“With the market starting to stabilise after a rocky few months, I hope that lenders will be confident enough to support buyers with attractive offerings,” Gatecliffe said.
Likewise, head of property finance at Finanze, Imogen Sporle said she also has a positive outlook for the new year.
“When the base rate rose in October we all predicted the worst, assuming lender rates would rise exponentially for the next few years, however the last two months have shown that is not the case.
“Lenders have been slowly reducing their rates again and dropping their ICR calculations. Almost all lenders that withdrew from the market are now back to lending,” Sporle said.
She added: “I have had many meetings with lenders since and it’s all been positive. Many hope to reduce their rates further when they bring out new products in 2023 and aim to reduce their ICR calculations further, which should help those delayed in remortgaging due to difficulty in raising rents.”