Now Christmas is over and the New Year is well and truly underway, all eyes are on the mortgage market for 2016.
The main focus of attention is falling squarely on interest rates, and whether homeowners will have higher rates to pay in the coming months. There were continual threats of interest rate rises throughout 2015, but it is looking increasingly more likely that actual rises will make themselves known this year.
The first experience of a hike in interest rates
Anyone who has taken out a mortgage for the first time since 2009 will have got quite used to super-low interest rates. This may well change in 2016. If rates do finally rise, they are only likely to do so gradually. However, for those who have always had the luxury of very low rates to pay each month, any rise is likely to be a shock to the system.
Could remortgaging see an early boost?
This part of the marketplace could see some increased activity as 2016 gets underway. The increased likelihood of the base rate rising – however gradually – means many people will be looking to lock in a low rate before it does so. Many experts believe the early months of this year will see a rise in remortgaging taking place.
The Mortgage Credit Directive comes into force in March
You may already have heard of the Mortgage Credit Directive, a creation brought into being by the European Union. The idea is to ensure the same terms and conditions are used among all banks and building societies offering mortgage products to customers. The new directive covers many different areas, including affordability. A cooling-off period is also going to be introduced – something that is entirely new to the market.
The end of buy-to-let?
The autumn Budget resulted in a big shock for those with buy-to-let properties. A tax relief perk had already been scrapped earlier in the year, and the Budget revealed another piece of bad news. Stamp duty on these properties was going up by 3%.
While it is uncertain how this will affect the buy-to-let market in the long-term, one survey has found that some landlords are planning to leave this marketplace. Others will call a halt to buying more properties to add to their portfolio.
Of course, this will have a positive effect for those who wish to buy their first property. They should eventually have more properties to choose from – a significant advantage for first-time buyers looking to buy a property rather than renting for prolonged periods of time. There is also a good chance house prices will stall instead of continuing to rise by significant amounts.
All in all, everything is set for 2016 to be a memorable and changing year on the mortgage market. Major changes to the buy-to-let marketplace are almost upon us – changes that will impact those looking to buy for themselves instead of to rent out. This can surely only be good news for potential first-time buyers.