We could see this picture change in the coming months - Comment on the lenders and administrators figures for Q4 from Adam Oldfield at Phoebus Software
14 March 2023
Adam Oldfield, chief revenue officer at Phoebus Software, says “There are a few things to take from the Bank of England figures today. The fact that new mortgage commitments was down will come as no surprise to anyone but, given the number of people coming off fixed rate deals it is a little surprising to see that remortgaging was also down. This may well be because borrowers didn’t know which way to go when the economy was looking so fragile in the last quarter of 2022. It looks like there was a significant proportion of people that let their fixed rates move onto SVRs with their current lenders, waiting to see what will happen to interest rates before fixing again.
“Arrears, although up, are still at very low levels. We could see this picture change in the coming months if predictions from Fitch last week play out. Nevertheless, even if the increase is to 1.5 per cent over the course of this year, it will be to more normal levels, rather than alarming levels. Affordability will be something that lenders will have to manage tightly for new borrowers, and for those coming off low fixed rates onto higher interest than they have previously been unused to coping with. This is especially true when we see that the number of 90% LTV mortgages is increasing.”
