Well, if there was one thing that summed up the mortgage market in the past week it was lenders’ rate cuts, with one after another announcing reductions on their home loan deals.
Wednesday of last week was dubbed ‘rate change Wednesday’, with Accord, Kensington and Nationwide all cutting rates on that day alone, and several others continuing the trend during the rest of the week.
These followed the ‘all-time low’ 1.29 per cent five-year fix from digital lender Atom Bank, which lasted just nine days before being pulled when funding lines dried up, albeit the bank retains a plethora of low rates on its books.
After all the attention focused on Atom Bank – which last week confirmed the signing of Will-i-am as its ‘strategic adviser’, an interesting and headline-grabbing move – Yorkshire Building Society launched its two-year variable deal at 0.89 per cent, which it duly claimed as “the lowest-ever mortgage rate”.
It’s unsurprising that lenders are lowering rates still further while the Bank of England base rate remains so low, and in a market that is still waiting for that elusive ‘certainty’ to land after so long without it. Of course, lenders can’t relax their criteria due to regulation, so rate cuts are the way to go in order to encourage transactions.
But one thing that holds true about the mortgage market is its resilience, and data released by Imla on Friday, which showed that mortgage lending this year was set to reach its highest total for a decade, was heartening.
Imla’s paper, ‘The new normal – prospects for 2017’, delivered a most welcome positive outlook for the health of the market, stating that affordability was improving and likely to continue to do so for the foreseeable future.
Although the buy-to-let market is still reeling from the effects of the many tax changes and stress tests applied over the past year, and Imla predicts a 6 per cent decline in total BTL lending this year, the body believes this drop in activity has bottomed out and the market will begin to recover during 2018.
The Oxford English Dictionary defines the word ‘resilient’ as ‘capable of recovering quickly from difficulties; tough’. That definition has been true of the mortgage market time and again, and there’s no doubt that the industry, including BTL, will prove its resilience once more.