Settling back to normality? Or is the pendulum swinging? - Comment on the BoE money and credit statistics for June from Richard Pike at Phoebus Software

29 July 2021

Richard Pike, Phoebus Software sales and marketing director, says “A dip in mortgage approvals in June could be the first sign that the market is settling back to some sort of normality after the frenetic action we’ve seen recently. Coupled with Nationwide’s reported fall in house prices you could be forgiven for thinking we are heading for another downturn. However, there is one factor that is likely to keep the market moving for both purchase and remortgaging, and that is mortgage interest rates and the current flurry of fixed-rate deals that are being announced on an almost daily basis. It appears that lenders are determined to keep the momentum going, and with 2-year fixes as low are 0.75% there is plenty of incentive for borrowers.

“With high st banks and building societies reporting record mortgage growth this year, there is plenty of scope for these historically low-interest rates and we can expect to see more and more tempting deals. We are already seeing remortgage activity gaining momentum, as the supply of properties coming to market slows. As current fixed rates come to an end we may see the pendulum swing from record purchase levels back to a growing remortgage market.”