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Mortgage activity is set to drop six percent in 2022 as rising inflation and interest rates put pressure on potential homeowners.
Broker Henry Dannell released data this week mentioning the housing market has fallen from its 2021 highs and interest rates have held back new buyers.
Figures precept mortgage activity to contract by six percent this year, in wake of the Bank of England’s sixth consecutive rate rise, to 1.75%.
This comes after a peak last year after the end of lockdown and stamp duty holiday, with Monetary Financial Institutions processing almost 1.5m mortgage transactions, an increase of 17 percent.
Rising rates predict a drop in MFI activity and a 16.5 percent fall in specialist lending, which previously experienced a spike in activity, up 19 percent since 2020.
Donnell Art Director Jeff Garrett said:
Massive government interventions in the housing market, such as stamp duty holidays, have increased buyer demand and allowed lenders to issue more mortgages than ever before.
However, as we enter the second half of 2022 in the face of a cost of living crisis and aggressive interest rate hikes, we expect a significant slowdown in MFI and specialty lender activity.
Reference Source: City AM
