A good start to the year - Comment on the Bank of England Money & Credit figures for December, from Adam Oldfield at Phoebus Software

30 January 2024

Adam Oldfield, chief revenue officer at Phoebus Software, says “It’s good to start the year with some positive news, mortgage approvals up and consumer credit down, even in the month before Christmas. The recent rate cuts, the latest now below 4% from the Nationwide, will be encouraging for those that were switched to standard variable rates (SVRs) last year. The waiting game may have paid off for some, but the increase from the historically low interest rates up to the current average SVR of over 8% will have put huge pressure on many households. Lenders will no doubt be inundated with borrowers looking to fix a new rate as quickly as possible.

“Unfortunately, that massive jump in monthly payments will have been too much for some borrowers, which was borne out by the rise in mortgage defaults towards the end of last year. When a UK minister has to quit his job because he can’t afford his mortgage you know the same problem must be being felt across the country. Then we hear that our Prime Minister is considering introducing a 99% mortgage to help first-time buyers onto the property ladder. When we have such a huge problem with supply in the UK, you have to wonder whether this ‘vote winning’ tactic is really what is needed in the long-term?”