Springtide Capital has predicted that the best mortgage rates of 2014 will only be available for six months at most. The broker has also predicted the start of a ‘rate war’ among lenders in the first three months of the year as a result of the Help to Buy scheme.
The mortgage guarantee element of the government scheme, which incentivises mortgage lending with a 5 per cent deposit, is predicted to intensify competition among lenders at the start of the year as more first time buyers enter the market.
Experts at Springtide Capital have predicted that the impact of Help to Buy 2 will see the lowest rates come to market for first time buyers in the first six months of 2014, making next year ‘The Year of the First Time Buyer.’ However, as 2014 progresses and economic data continues to improve, the broker has anticipated that rates will increase once again, which will slow down and reduce the likelihood of a bubble starting.
Managing director of Springtide Capital, Henry Knight says: ‘I do not believe we are seeing the emergence of a housing bubble though we are clearly at the start of an improving market. Next year is set to be the year of the first time buyer. The Help to Buy schemes are going to present a great opportunity for people who have historically struggled with deposits. Our advice is to try to make the most of the first half of the year while rates remain low.’
