11th July 2023

Activity in the housing and mortgage markets is hotting up – and cooling down. According to the latest Residential Market Survey from the Royal Institution of Chartered Surveyors, a run of thirteen successive negative monthly readings for new instructions ended in May, marking the strongest reading for new listings since March 20211. Yet house prices are still predicted to fall in the second half of the year. 

What next for house prices? 

House price growth dipped in May and notably the annual rate of growth fell to -1.0%, marking the first time since 2012 that house prices have fallen year-on-year2. It remains to be seen which way the market will veer in the second half of 2023. 

If, as many are predicting, a flurry of mortgaged homeowners are forced to sell up when their current fixed-term deals end, the market could see a boost to supply that might reinforce the downward price movement. Analysts suggest too that first-time buyers (FTBs) could be delaying their homebuying plans in the hope that mortgage rates or house prices are about to fall sharply. 

Bank Rate 

Meanwhile, the Bank of England’s (BoE’s) Monetary Policy Committee (MPC) increased Bank Rate in June, taking it to 5%. Borrowing costs are now at their highest level since 2008. Those with tracker or variable rates have seen immediate higher repayments. 

Return of the 100% LTV mortgage 

The mortgage market is kicking back into action too, with one especially noteworthy development, the launch of a new mortgage product that allows FTBs to take out a loan on the full value of their home. The 100% loan-to-value (LTV) mortgage is exclusively for current renters and depends on their being able to prove a track record of timely rent payments. 

Don’t second guess 

Whatever happens in the months ahead, we’re here to help you make the right decisions for your unique circumstances. 

1RICS, 2023 

2Halifax, 2023 

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.