With the market moving fast and news constantly changing, it can be hard to keep up with everything going on, let alone see the forest for the trees. So, let’s break down exactly what has happened in the mortgage market this year, as well as looking at the bigger picture in terms of what this means for brokers and their customers moving forward.

Firstly, let’s talk about the Bank of England base rate. There have been seven base rate increases in total this year, along with one in December 2021. Within these rises, there have been five bigger increases since May 2022, starting at the 0.25 per cent increase to 1.00 per cent in May through to the current 0.75 per cent increase to three per cent in November.

It was this latest and biggest, increase that was implemented in response to the measures within Kwasi Kwarteng’s mini-budget, the majority of which has now been poleaxed by Jeremy Hunt in the Autumn Statement.

However, the mortgage market responded just as quickly to these changes. Thousands of products were retracted or suspended, with lenders struggling to price mortgages due to market uncertainty and therefore needing to reprice them.

This caused a spike in borrowing costs for those products that remained. Mortgage rates skyrocketed in response to rising inflation and are only just beginning to stabilise, with predictions that they will settle at a four to five per cent average by 2023. 1

It’s not all doom and gloom, though. While the rapid rise in interest rates was certainly unprecedented, if you look at rates in terms of the national average over the last five or six years, we’re still not in a bad place in the grand scheme of things.

Banks are still very much open for business, lending is readily available, and in the last three or four weeks we have witnessed upwards of a dozen lenders reducing their rates.

This indicates that many lenders reacted too quickly to an anticipated base rate rise, and are now in the process of correcting this by reducing their rates.

Closer to home, here in Yorkshire, we haven’t been witnessing any significant drops in terms of house price growth.

While prices continue to remain on an upward trajectory, it certainly isn’t to the levels previously seen - once again indicating that things aren’t half as bad as they may first appear.

From a broker’s perspective, it’s important to remember that the remortgage market is very much active at the moment and there is plenty for us to do. While there has been a lull in the number of new house sales, there are still over 100,000 homeowners per month whose initial mortgage term is coming to an end.

With monthly repayments for many remortgage customers almost guaranteed to increase and many of us tightening our belts due to the cost of living crisis, it’s reassuring to know that rates won’t be continuing to rise at the pace they have.

Expert analysis of this year's mortgage market