The information contained in this article was correct at the time of writing
December 11, 2023
Personal Residential Mortgages & Remortgages
The UK mortgage market has gone through significant changes over the past decade. As the country’s leading mortgage advice platform, we understand the complex factors borrowers must weigh when financing what is likely the largest purchase of their lives – a home. Our team of experts provides borrowers with clarity and confidence during the mortgage process. Read on for an overview of the UK mortgage market and remortgage landscape.
Residential Mortgage Market Overview
The UK gross mortgage lending reached £316 billion at the end of 2021. This represents a record annual lending total, indicative of a hot property market. House prices increased 10.8% year-over-year nationwide, meaning larger mortgages for homebuyers.
As the Bank of England steadily increases interest rates to curb inflation, mortgage rates are also climbing from all-time lows. The average 2-year fixed mortgage rate sat around 2.5% from January 2021 through October 2021. By October 2022, the same average rate was over 6%. Most economists expect continued rate rises into 2023. This impacts monthly payments and affordability for new mortgages and remortgages.
The mortgage market faces an additional challenge – stricter affordability testing implemented in recent years. The loan-to-income (LTI) flow limit caps lending at 4.5 times income. The loan-to-value (LTV) flow limit caps lending at 15% for LTVs over 85%. These regulations aim to prevent overleveraging but also restrict lending capacity.
Our mortgage brokers help clients navigate rate changes and affordability criteria to secure favorable outcomes. We work with over 90 lenders to source ideal options. With an 87% mortgage completion rate over the past year, our experts simplify every step.
Remortgaging Activity
Remortgaging accounted for over a third of all mortgage lending in Q3 2022. As fixed terms end, homeowners seek better deals. Of homeowners who remortgaged, 67% reported doing so to access lower rates before additional base rate rises.
Remortgaging remains an effective way to save on monthly payments, access better rates and flexibility, or release equity. With over half of borrowers on 2- and 5-year fixes ending within two years, activity is poised to increase.
The most remortgaged age groups in 2022 include 35-44 at 28% and 45-54 at 27%. However, the fastest growth has come from homeowners aged 65+, increasing over 20% since 2021. These borrowers often seek retirement interest-only mortgages or smaller mortgages following downsizing.
- Full market review – We compare thousands of products using real-time data to match specific goals
- Rate analysis – We project how various rate types will perform through the next fix term
- Lender guidance – We narrow options to secure the optimal lender based on criteria
- Application support – We manage paperwork, affordability proofing, valuations and solicitors
- Rate locks – We help clients lock current rates for fee security when deals are identified
Over 8 in 10 of our remortgage customers surveyed reported feeling confident, relieved, and meaningfully less anxious after working with us.
Get in Touch for Mortgage & Remortgaging Guidance
As interest rates and house prices evolve over 2023, rely on our dedicated advisors to match borrowers to ideal mortgages and remortgages. To discuss new purchase or remortgage plans in detail, contact us today. Our UK-based team looks forward to helping navigate the path to home financing success.
