Welcome to the first edition of Paradigms newsletter for 2025. I hope the market is treating you well. It appears the first two months of 2025 in terms of mortgage activity has seen the market demonstrate notable activity and confidence. Data from Barclays revealed that confidence in the housing market grew to 30% throughout the month, which is the highest level since October 2024, up from 24% in January. Such positivity is also seen in average house prices as they have risen by 0.7% in January, reaching a record high of £299,138. This increase is driven by strong demand and a limited supply of properties, leading to heightened competition among buyers. To coincide with this confidence and positivity, mortgage product availability reached a new record of 25,090 in February, Twenty7tec data reveals. The latest figures show that this was the first time there have ever been more than 25,000 products available. It also shows the month end total was up by 2.33% on January 2025. Selection of products remain weighted towards two-year fixed mortgages not surprisingly, they accounted for 41.05% of all fixed product searches compared to 41.13% in February 2024. Three to five-year fixed mortgages accounted for 35.71% of all fixed product searches compared to 35.73% in February 2024. Five to ten-year fixed mortgages now account for 23.24% of all fixed product searches compared to 23.14% in February 2024, which probably reflects customers desire not to be locked in too long as many think we’re on a lower trajectory over the next 18 months. The market is also currently at a new high for products in the maximum 90% loan-tovalue (LTV) and maximum 95% LTV ranges, with over 1,806 products available in these ranges. Last month also set a record for the highest number of average products available, at 24,776.1 products per day. This represents 27.1% more products available per day, on average, in February 2025 compared to the same month last year. In terms of mortgage lending, the FCA reported a 4.9% increase in gross mortgage advances from the previous quarter, so far in 2025, totalling £68.8 billion. The highest since Q4 2022. This increase is partly attributed to a competitive lending environment, with many borrowers refinancing before their fixed-rate deals expire. In the week ending the 3rd March, lenders reported a residential market size of £6.3 billion, and a BTL market of £821 million. Interestingly, the BTL market appears to be confounding the experts. Remortgage applications continue to dominate accounting for 73% of the value of applications in the week. Year to date in both 2024 and 2025, remortgages captured 74% of application value. However, the first 9 weeks of this year saw a significant increase in the overall value of BTL applications compared to 2024, up to £7 billion compared to £6.7 billion. Average application values were also higher for the year-to-date compared to the same period in 2024; £170.1k compared Richard Howes Director of Mortgages Paradigm Mortgage Market Update 04 MORTGAGE NEWSLETTER
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