2019 Mortgage market review of the year. Economic and Political uncertainty has dominated 2019, but homebuyers and those who are thing about a remortgage have continued to benefit from low mortgage rates.
We will look back at some of the changes that has affected the mortgage market, buyers and movers over the last year.
It’s been a lethargic year for the property market, even though prices have held up in some regions due to the limited supply of homes for sale. Autumn months brought slight bounce in house price growth, with Halifax predicting that this emerging trend of modest gains will continue into 2020.
Those who’ve decided to take the move in 2019 have been helped by low interest rates and competitive mortgage deals which have helped improved affordability.
First time buyers
First time buyers usually have limited deposits, but even those with only 5% or 10% of the property value have had a wide choice of low-cost mortgages to choose from this year. The new Help to Buy scheme has continued to support buyers with low deposits, and will continue to do so, with changes already announced for 2021.
More than 150,000 first time buyers bought a property in the first half of 2019, according to a recent report by Halifax, the highest number recorded in more than a decade.
A lot of homeowners have chosen to stay put and ‘improve rather their home than move so the remortgage market has seen a lot of activity this year, with lenders competing for business particularly towards the end of the year.
Medium to long term fixed rates, which give homeowners with valuable budgeting certainty, have dropped to record lows in recent months, so they are now only marginally higher than shorter term deals.
Buy to Let
Landlords faced more restrictions in mortgage interest relief from April 2019 and are currently only able to claim 25% of mortgage tax relief.
Those wanting to minimise the financial impact of these changes have remortgaged where possible to reduce their outgoings.
Looking forward to 2020
Time will tell what impact the Conservative party’s election win and the ongoing Brexit negotiations will impact the mortgage market, but if you’re thinking about remortgaging or getting on the property ladder in 2020, don’t waste time about it if you’ve spotted a deal you want.
It’s would be wise to make sure you have a rainy day fund in place before you consider making mortgage overpayments, to ensure you won’t be short of savings in the event of an emergency.
It’s best to check with your lender how much you can overpay. Some mortgages will carry an Early Repayment Charge during the deal period. However, the majority will allow some overpayments without a charge, typically up to 10% of the mortgage balance each year although it can vary by product and lender.