Following a busy year that left the shelves bare, there are some early signs the property market is about to receive a much needed pick up in supply. The number of property valuations conducted by Knight Frank in the first few days of September was up 10% on the same period in 2019.
That comes as lenders step up competition for market share. Many providers have dropped rates at higher LTVs in recent weeks and there are now 862 products available on the high street for those seeking a 90% or 95% LTV mortgage, according to Moneyfacts, the highest amount since the onset of the pandemic.
It's clear that rates on lower LTV mortgages are reaching the bottom and lenders are looking elsewhere for growth. This is great news for borrowers including first time buyers who were largely frozen out during the height of the pandemic, with very few options.
The Bank of England’s announcement today that it will hold the base rate at a record low 0.1% means mortgage rates across the board will remain attractive for some time, but the longer term outlook looks less certain.
“With each day that inflation climbs, a rise in the base rate draws nearer,” says Simon Gammon, Managing Partner at Knight Frank Finance. “We expect the lending market to be busy this Autumn before the traditional Christmas slowdown. From that point onwards, borrowing costs could start their slow march higher. Those seeking to lock in rock bottom rates would do well to act soon.”
Autumn is likely to be particularly busy in prime central London, following the government’s decision to ease restrictions on travellers entering England. Almost a quarter of web users browsing properties online with Knight Frank were based overseas during August, the highest figure since January 2020.
That will be music to the ears of the private banks, according to Alex Ogario, Head of the Private Office at Knight Frank Finance.
“The absence of overseas buyers during the year so far means some prime lenders have a long way to go to hit their lending targets,” Ogario says. “There is a significant amount of capital waiting on the sidelines to be deployed and, as a result, borrowers are in a unique position to secure rates that are unrivalled in recent years.”
If you, a family member or friend is looking to buy a property in 2021 and would like to discuss the options when it comes to securing a mortgage, speak to us. We know all the major lenders in the marketplace and can help find the most cost-effective and suitable mortgage for you.