Market Update - April 2024
Sam Norris, CEO of UnionX Group, Managing Director of Grand Union Finance & our Strategic Partnerships Adviser at Let’s NVST shares his monthly market update.
Mortgage Market Update
Mortgage rates have been on the rise, presenting both challenges and opportunities for property investors. The root cause of this upward trajectory lies in the volatility of swap rates, which serve as the benchmark for lenders in determining borrowing costs. This volatility stems from inflationary pressures, both domestically and internationally.
In the United States, recent inflation data indicated an uptick, leading to speculations that the Federal Reserve may not be as quick to lower interest rates as initially anticipated. Projections now suggest that any rate adjustments may occur later in the year, with expectations tempered to only two decreases throughout 2024, down from the earlier forecast of three.
This shift in stance by the Federal Reserve has reverberated across the pond, influencing the monetary policy outlook of the Bank of England. Similarly, the UK is grappling with inflation levels that have yet to recede to the desired target of 2%, currently standing at 3.2%. As a result, expectations for a reduction in the base rate have been pushed further into the future, likely not materialising until late summer or early autumn, or even extending into the fourth quarter. Forecasts indicate a conservative estimate of two rate drops by the year’s end, culminating in a projected base rate of 4.75% by 2024’s conclusion.
This delay in monetary easing has translated into an uptick in mortgage rates, as the adverse impact on swap rates exacerbates borrowing costs. Investors navigating the property market must factor in these evolving rate dynamics when formulating their financing strategies and investment decisions.
Bridging Market Insights
Concurrently, the bridging finance sector has witnessed a surge in activity, buoyed by a myriad of investment opportunities. Data from 2023 reveals a notable uptick in bridging finance applications, signalling heightened interest in leveraging this financial tool.
The allure of bridging finance lies in its versatility, catering to a spectrum of investment strategies. From property acquisitions at auctions to facilitating transactions involving distressed properties, bridging finance offers a nimble solution tailored to the dynamic needs of investors. Moreover, it serves as a vital resource for ventures such as property refurbishments and buy-refurbish-refinance projects, providing liquidity and flexibility in executing strategic initiatives.
Looking ahead, the prevailing trends indicate a sustained demand for bridging finance throughout 2024. As investors explore innovative avenues to capitalise on market opportunities, bridging finance emerges as an indispensable ally in navigating the intricacies of property investment.
In conclusion, the evolving landscape of mortgage and bridging finance underscores the importance of staying abreast of market trends and leveraging financial tools judiciously. With mortgage rates experiencing upward pressure amidst shifting monetary policies, and bridging finance offering agility in capital deployment, investors are presented with a dynamic environment ripe with opportunities for strategic growth and investment success.
Contact us today for a free consultation and unlock the full potential of your property investment journey through tailored financial advice.
Email: info@grandunionfinanceltd.co.uk
Phone: 0121 828 1400
