Mortgage experts share five predictions for 2023

While the past three years have certainly reminded us all of how unpredictable the market can be, there will always be value in reading the room and assessing market sentiment. With that in mind, we have distilled the key messages dominating industry conversations into five key takeaways.

1. Housing demand not being matched by supply

The UK’s longstanding imbalance between housing supply and demand is set to continue throughout 2023. While experts generally expect to see demand for mortgages remain high across the country, fluctuating rates will create a highly competitive market, with supply failing to match it.

2. Interest rates to fluctuate moving forward

2022 closed with the ninth consecutive interest rate rise. Some forecasters have suggested that the Bank of England will continue to hike rates until at least early 2023 to counter inflation, before taking a pause to measure how high interest rates are impacting economic growth. Many suggest that rates have now hit their peak.

3. The UK property market will remain resilient

Gross UK mortgage lending is back to pre-pandemic levels, despite record inflation, which is testament to the strength of the market. Banks keen to lend, given excess liquidity, further stoking demand.

4. Product choice will remain strong

Product ranges have expanded significantly to meet changing consumer needs in the past three years, and are set to remain strong in 2023.

5. Future homebuyers should ‘act sooner rather than later’

With a large proportion of fixed-term mortgages due for renewal in 2023, many are urging customers with upcoming renewals to start shopping around sooner rather than later to avoid falling into an expensive standard variable rate. Unfortunately, those looking to buy or remortgage this year will most likely be paying more than they would have last year, as we settle into a higher rate environment.

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