Shoppers are fighting to bag a bargain today across the land. There are news reports of kids getting punched and TV’s falling on people in stores! All a bit crazy as I reckon if you hang on a few weeks they will be back at these bargain prices once again.
Reflecting on this price crash madness I am minded to look at the mortgage market and I think we’ve had a “Black Friday” for the last couple of months. Bizarrely a year ago I wrote of rates being low, and possibly artificially, due to the Bank of England Funding For Lending Scheme. I suggested that there may be the possibility of mortgage deals being higher. In the early part of the year there was a bit of adjustment but the market has remained very competitive.
More so in the last month or two there are some really good mortgage deals around. Barclays, HSBC, Skipton and Nationwide all have deals available around the 1.5% mark for those with the right amount of deposit or equity.
I’m surprised this has not fuelled the housing market, which has tailed off a lot in the latter half of the year. According to Nationwide’s House Price Index report for November the housing market is “weak”.
“Housing market activity levels have remained relatively weak in recent months. The number of mortgages approved for house purchase in September was almost 20% below the level prevailing at the start of the year and 27% below the long-term average. Similarly, housing market turnover rates are well below long-term averages. For example, the number of mortgage transactions is currently equal to around 4% of the housing stock – well below the long-run average of 6%.” – Robert Gardner, Chief Economist, Nationwide Building Society.
Mr Gardner goes on to say that the economy is strong with unemployment falling to 6% and confidence is high when looking at other sectors such as retail. Strange then that the housing market seems stagnant with low growth and low stock. I feel market forces have dictated the pace here. The general buying public have said “I think that house is too much” and walked away. As a result people don’t move and don’t put their house on the market.
The housing market has always been seasonal though and come the new year I think there will be another mini bubble with new stock coming onto the market and first time buyers pushing the market from the bottom up.
If you are thinking of a move or a remortgage then the “Black Friday” deals around at the moment make it a good time to take the plunge.