Mortgage activity is set to drop six per cent in 2022 as rising inflation and interest rates put pressure on potential homeowners.
Brokers Henry Dannell published figures this week showing the housing market had crashed from the highs of 2021, with interest rates putting off new buyers.
Figures precept mortgage activity to contract by six per cent this year, in wake of the Bank of England’s sixth consecutive rate rise, to 1.75%.
This comes after a peak last year after the end of lockdown and stamp duty holiday, with Monetary Financial Institutions processing almost 1.5m mortgage transactions, an increase of 17 per cent.
Rising rates predict a drop in MFI activity and a 16.5 per cent fall in specialist lending, which previously experienced a spike in activity, up 19 per cent since 2020.
“The mortgage activity boom of 2021 marked a high point for the market”, said Henry Dannell director Geoff Garrett.
“The government’s pandemic intervention on the housing market, such as the stamp duty holiday, led to a surge in buyer demand that enabled lenders to grant more mortgages than ever before.
“But, as we enter the second half of 2022, confronted with a cost of living crisis and aggressive interest rate hikes, we can safely expect a significant decline in activity for both MFIs and specialist lenders.