2021 has been marked as the year of the seasoned home mover, according to a news report by the BBC. In fact, home mover mortgages (mortgages offered to those who already own a property) represented 42% of total mortgage lending between January and March. This is up from 27% in the same time last year.
Surprisingly, first time buyer mortgage lending only increased by 2% during the same three months. This is quite interesting to see given the amount of support currently available to those applying for a first-time buyer mortgage.
What’s happened in the last year?
As a mortgage broker we have witnessed some major domestic and global economic events since we opened our doors; it’s fair to say that the last 12-15 month period has been a time like no other! As expected, the start of the pandemic saw demand for first-time buyer mortgages and home buyer mortgages decrease. However, it didn’t take long before demand for both increased significantly because of the stamp duty holiday.
The current market is now in a position where demand is growing rapidly; much of it is due to the pandemic’s bottlenecking effect. This is due to those who wanted to move but couldn’t as the pandemic took hold and uncertainty crept in. Home movers are now taking advantage of the competitive mortgage deals currently on the market; and trust us when we say that there are many!
What’s happening in the property market?
The current property market is seeing a large house price inflation growth that is behind the boom in home mover mortgage demand. House price inflation has hit a seven-year high of 10.9%; which means that many people are trying to sell while the price is high.
This means that those who are selling high and moving out of areas such as London and Surrey; will be able to get more for their money. This also means that if they’ve made inflation-related equity gains, they may even be able to borrow more too. This is a strong contender as to why we think home mover mortgages are on the up in the market.
Our perspective
Our view is that whilst it’s great for homeowners who are seeing what is probably their prime asset grow in value; it’s unlikely that it will last forever. After all, the overall way of curbing inflation is to raise interest rates; which is likely to reduce demand for properties and the price of the properties themselves.
On that note, if you’re looking to sell your property on a high and get a new mortgage before any potential future low affects the market, then get in touch with our team. We help existing homeowners, many of whom are longstanding clients, get great mortgage deals on a daily basis. Find out how we can help you by contacting our team on 01634 968111 or booking an appointment online.
