If you’re a homeowner in the United Kingdom, then you’re likely aware of the recent drop in mortgage products. In case you’re not, mortgage products are basically the different types of mortgages that are available to consumers. This drop-off is expected to have a significant impact on the UK property market. Here’s what you need to know.

It’s not as if a drop-off in available mortgage products is a new phenomenon in the British housing market. Events of the past couple of years make this seem like an annual occurrence, and here in 2022, we have another reason for lenders to be cautious.

With fewer mortgages available and increased costs associated with obtaining one, it’s expected that buying a property will become more difficult for UK residents. In addition, those who already have a mortgage may find it more difficult to remortgage their home at a lower rate when their current deal expires.

All of this is likely to have a negative impact on the UK property market as a whole. Values are expected to fall as demand decreases and fewer people are able to buy homes.

Rental prices are also expected to rise as people who would normally buy homes instead opt to rent due to difficulty securing a mortgage.

The recent drop in mortgage products is expected to have a significant impact on the UK property market in the form of lower values and higher rental prices.

What do experts think?

Tim Bannister from Rightmove said: “The number of sales being agreed on Tuesday (27th September 2022) was at its highest number in a day since early August, perhaps as some people rush to get a mortgage before rates rise further. Over the past month activity has shown that the housing market has been surprisingly resilient against headwinds of rising rates and so it looks like for those who can move, they’re going ahead for now. We’ve seen demand softening in the past few months, but buyer demand is still 20% higher than the pre-pandemic five-year average, house prices are 15% higher than they were two years ago, and the overall number of homes going through conveyancing is 40% higher than in 2019.”

Ben Thompson, deputy chief executive of Mortgage Advice Bureau, said: “Were it not for the developments seen over the last week, this is a question that would instantly be shrugged off, even laughed off.  However, the current circumstances mean we now need to give this more consideration. For this to happen, we would need demand for housing to fall off a cliff in a very big way, as currently, even now, demand for housing still outstrips supply, meaning it looks unlikely to happen. Much hinges on the extent to which interest rates rise and whether or not we see a wave of new and far-reaching unemployment. The most likely scenario is that demand falls back from current levels and that there is a flattening off in house prices from now onwards, and probably single digit falls on and off for a few months.”

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