- Mon 03 Oct 2022
There is a great deal of uncertainty and misinformation in the market place at the moment.
Let's confirm some facts:-
Lenders are not withdrawing from the market, in the main, they are removing products from their range and in general, are repricing them at higher levels. It is a very different scenario from the financial crisis we experienced 14 years ago and the reasons for things being as they are is very different.
Essentially, the wholesale cost of borrowing is rising erratically and unpredictably, in significant part to what is happening Ukraine and also due to the concerns caused in the financial markets by the chancellors mini budget and as with any market, lenders will react with their pricing accordingly as they have to maintain a profit margin.
Interest rate position:
The Bank of England has raised the base rate too and this is to combat the cause of high inflation, which is at its highest point for over 30 years. This is the mechanism the Bank uses to try and curb, control and reduce inflation – many will know the government has long had a target of 2% for inflation and the reason for keeping inflation low, is quite simply that high inflation causes many economic problems, which ultimately costs jobs and with inflation current at 10%, this clearly needs addressing.
Lenders are not withdrawing mortgage offers already made – if you have had a mortgage offer from a lender in relation to a purchase, re-mortgage or switch with your current lender that should be honoured. Be very careful when listening to, watching, or reading the media. The terminology is very important and in some cases, media outlets have used completely the wrong description of the situation and this has resulted in a great deal of panic among borrowers – not helpful at a time when finances are a worry for many with rising energy costs and the weekly shop also becoming more expensive.
In short, don't panic and as with all things financial, seek out an expert and take advice before being panicked into a decision that you may regret.
My team and I are on hand to help with any mortgage or re-mortgage enquiries, simply call 01395 222391 and we can arrange a meeting, telephone call or video call.