2019 Mortgage market review of the year

Political and economic uncertainty may have dominated 2019, but homebuyers and those looking to remortgage have continued to benefit from rock-bottom mortgage rates.

Many home movers, however, have adopted a ‘wait and see’ approach over the past year, putting plans to sell on hold until there is greater clarity on Brexit. Whether the Conservative election victory will change this and provide a boost for the property market remains to be seen.

Here, we look back at some of the changes that have affected the mortgage market, buyers and movers over the last 12 months.

Property prices

It’s been a sluggish year for the property market, although prices have held up in many regions due to the limited supply of homes for sale. Autumn saw a 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 plunge and move in 2019 have been helped by ultra-low interest rates and competitive mortgage deals which have improved affordability.

First time buyers

First time buyers often have limited deposits, but even those with only 5% or 10% of the property value to put down have had a wide choice of low-cost mortgages to choose from this year. The Help to Buy scheme has continued to support buyers with smaller deposits, and will continue to do so, with changes already announced for 2021.

More than 170,000 first time buyers bought a home in the first half of 2019 alone, according to a report by Halifax, the highest number recorded in more than a decade.

The Bank of Mum and Dad has continued to help many first time buyers this year, and it’s been suggested that the Bank of Gran and Grandad are also increasingly involved in raising a deposit. Lenders have continued to develop products to support those relying on family support, including, for example, ‘joint borrower sole proprietor’ mortgages where the title deeds are only in the child’s name, but the mortgage is held in joint names with the parents.

Remortgages

Many homeowners have opted to stay put and ‘improve rather than move’ in light of Brexit uncertainty, so the remortgage market has seen plenty of activity this year, with lenders busy competing for business particularly in the last quarter of the year.

Medium to longer term fixed rates, which provide homeowners with valuable budgeting certainty, have fallen to record lows in recent months, so they are now only marginally higher than shorter term deals.

Buy to Let

Landlords faced further restrictions in mortgage interest relief from April 2019 and are currently only able to claim 25% of mortgage tax relief.

Those seeking to minimise the financial impact of these changes have remortgaged where possible to reduce their outgoings.

With further reductions in tax relief due to come into effect from April next year, Buy to Let remortgage activity in particular is expected to remain high as we go into 2020.

Looking forward to 2020

Only time will tell what impact the Conservative election win and ongoing Brexit negotiations will have on the mortgage market, but if you’re thinking about remortgaging or getting on the property ladder in 2020, don’t delay if you’ve spotted a deal you want.

Whilst it’s impossible for anyone to know which way interest rates will move next, these ultra-low mortgage rates may not last forever.