Mortgages rarely hog the limelight when it comes to the property market.
But the abrupt exit of the Stamp Duty stampede has left a vacancy centre stage, and mortgages might just be emerging from the wings to take it.
Rather than falling away after the temporary Stamp Duty incentive ended in April, first-time buyer activity is proving robust thanks to changes in the mortgage market.
The Bank of Englandโs data shows that the average interest rate on new mortgages has fallen for four months in a row, and this is encouraging more people to apply for a mortgage to help them buy their first home.
Mortgages are getting cheaper, and with the supply of homes for sale at its highest level in a decade, property prices are levelling off or even falling in some areas. All this is creating a buyerโs market and nudging would-be buyers who are fed up with rising rents to get off the fence.
With new affordability rules making it easier for people to get their first mortgage, and allowing lenders greater flexibility in the amount they lend, the mortgage market is playing an essential role in keeping the cooling property market moving.
With the Bank of England widely expected to reduce its base rate again next week, stress rates – the rate at which borrowers’ affordability is calculated at – could go down even further, allowing even more borrowers into the market.
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