How will mortgage costs be affected this year?
Following the Liz Truss mini-Budget in September, the end of 2022 saw three increases to the Bank of England base rate which resulted in higher mortgage rates (and associated costs of borrowing). Currently the Bank of England base rate sits at 3.5%, and whilst some analysts are predicting further rate rises in 2023, the peak is anticipated to be lower than previous industry forecasts.** Anyone looking to remortgage this year may experience cost challenges still, however, there are signs of more stability in the mortgage market compared to 2022, with a wider range of mortgage products.*** However, base rate changes and lenders' reactions will need to be closely monitored when the Bank of England’s Monetary Policy Committee next meet on 2nd February 2023.
What’s new with legislation in 2023?
June 2022’s white paper on rental reforms, including the Decent Homes Standard and the removal of no-fault evictions, will mean some changes in legislation are probably coming. However, the extent of any amendments is yet to be seen within the private rental sector, as Michael Gove’s return to government hints at a certain level of continuity.
Another topic that will remain ‘hot’ this year will be the Minimum Energy Efficiency Standards (MEES) ‘pencilled’ for 2025. Currently, properties in the private rented sector need to have a minimum energy performance rating of E but the government is proposing that this is raised to a C rating. Although there is no confirmation of the change, it might be wise for landlords to factor in improvements. In the current environment, where energy efficiency is high on the political agenda, it would be a surprise if changes to standards were not to be introduced at some point.
Whether you’re looking to move, buy or sell in 2023, the property market could provide you with various opportunities as it continues to show a consistent level of activity throughout.