Mortgage Market Forecast

Mortgage for Business have just sent us the following:

UK Finance have released their annual Mortgage Market Forecasts and it makes really interesting reading.

Firstly, there is no doubt that 2021 was a busy year for the housing market.  Property transactions are expected to end at 1,539,000 compared to 1,045,000 in 2020 and 1,177,000 in 2019 which really does reinforce what we knew – a lot of people bought houses this year.

But how will this look going into 2022, with the absence of a stamp duty holiday, a huge amount of uncertainty around Covid, economy, inflation and interest rates?  Well, things are certainly going to be quieter than 2021.  But actually, the expectation is that housing transactions (eg purchases) will sill be higher than pre Covid times with UK Finance expecting there to be 1,172,000 transactions in 2022, and, in 2023, 1,149,000.

What will be driving this?  Invariably the shortage of UK housing stock and the increasing demand will the key driver here, under pinned by further movement by homeowners making changes to their living arrangements on the back of lock downs and hybrid working.

Interestingly, UK finance have also covered off some interesting stats around mortgage arrears and repossessions – 2021 recorded the second lowest number of mortgage arrears in the last decade (no doubt mortgage payment deferrals helped here) and possessions were the lowest in 10 years (again, owing to the measures put in place during Covid which ended on 1st June.  UK Finance are expecting arrears and possessions to increase in 2022 but the numbers sit at the levels seen in 2017 for possessions and 2014 for arrears – way below the figures seen dying 2011-2013.

What this tells us is that whilst there is an expectation that some people will be struggling with keeping up their payments owing to the knock on effect of Covid, high inflation and interest rate rises, they are not expecting the same level of fall out which was felt on the back of the credit crisis – really reassuring news for sure.





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