Mortgage Market News

Market News January 2023

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Tuesday January 10, 2023

We ended 2022 with many predictions of economic doom and gloom for 2023.  Certainly, we will likely experience more unpredictability than we have in previous years, with inflation still high at around 10% (although having potentially peaked) and interest rates and energy bills predicted to continue rising throughout the year.  It’s clear that the UK is now in a period of recession – for how long and how deep, we just don’t know.  Although job vacancies are still relatively high at (circa) 1.19m as of November, there are indicators that the labour market is cooling, according to the latest figures from the Office of National Statistics which show that unemployment rates are rising (source: Employment in the UK – Office for National Statistics (

So what does this mean for the UK housing market?

A cooling of demand and lower house prices could provide opportunities for prime buyers, particularly those from overseas

High inflation, rising interest rates and a dampening of the job market will all have an impact on UK property prices in 2023, as the majority of people curb their spending and sit tight.  This will lead to a cooling in demand for some properties which will provide buying opportunities, particularly for high net worth individuals at the prime and super prime end of the market. If you are looking to buy a property, whether to reside in or as an investment, and you have the financial capacity, then the current situation could provide an opportunity to snap up the right property at the right price.  Some analysts are predicting a fall in house prices of between 5-10%, which is a sizeable discount on a prime property (source: Will house prices fall in 2023? – Times Money Mentor ( In addition, buyers and UK expats, who can take advantage of favourable currency exchange rates, could pick up a bargain property in the UK.

Fixed rate mortgages more attractive as rates begin to fall

One major driver of the housing and mortgage market is interest rates – low rates mean cheaper borrowing.  The Bank of England’s emergency measures in Q4 of 2022 to increase the Bank Base Rate drastically in order to tackle inflation, curb spending and deal with the fallout from the actions of the Liz Truss government, were essential. However, with the economy stabilising somewhat and fixed rate pricing becoming more reliable, we are beginning to see rates on fixed rate mortgages fall, from highs of more than 6.5% in October to something closer to 5% (source: What’s The Latest With UK Mortgage Rates? – Forbes Advisor UK).  If fixed rate pricing continues to stabilise then it will be difficult for the Bank of England to justify further increases in the Bank Base Rate, so the end may be in sight for further rises.

Lenders will be seeking solutions to attract new borrowers and remortgagers

This is positive news for those looking to secure a new mortgage or arrange a remortgage. Lower fixed rate deals will give borrowers more certainty over their mortgage repayments and should inject some confidence into homeowners and buyers, restoring faith in the housing market. Lenders, who most definitely haven’t shut up shop, are keen to attract borrowers and so are consistently working on lending solutions to suit all.  This could include extending mortgage terms, moving borrowers onto interest only mortgages temporarily or suggesting a move to part capital repayment and part interest only.  We have relationships with over 300 global lenders, from private banks to specialist lenders, who are only to happy to work out the right solution for their clients.

Negative impact to the housing market will be short-lived

Any doom and gloom around a cooling housing market, we believe, will be short lived. One point to remember is that there is still a shortage of good housing stock in the UK, a problem that, without substantial government intervention, isn’t going to ease any time soon.  So, any negative impact in 2023 on house price growth will be temporary as people still need somewhere to live and once inflation, job security and interest rates begin to stabilise, interest in the property market will be stimulated once again.  Banks are keen to also play their part, working to find solutions for all borrowers, so we expect to see confidence restored in the not too distant future.

We are here to help
Whether you are looking for a new mortgage or want to switch to a cheaper deal, then seeking advice from professional mortgage advisers is essential. Our team has access to over 300 lenders globally and can create bespoke solutions no matter how complex your situation may be. Call us today on  020 7519 4900 to see how we can help.

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