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Your January market update

Increased borrowing? A record start to the year? We talk through what this month's headlines mean for you.


January has already been an eventful month – and the year is only just getting started. With one of the busiest times on record for property valuations and with the introduction of mortgages with 7x borrowing both making property headlines, it looks as if January is going to be action-packed. We’re here to guide you through the housing market and – most importantly – to explain what this means for you. Welcome to the first monthly update of the year.

We’re off to a bumper start

The housing market has seen its busiest ever first week. It looks like many of us have decided to begin the year with a fresh start and have put our houses up for sale. Rightmove recorded a 44% jump in requests for valuations compared to this time last year. And that’s not all, on January 4th Rightmove also saw the fifth-highest number of valuations requests it’s ever recorded. But what does all this mean for the year ahead?

Well, opinion is divided on this one. Some see this as an early indication that the market will continue to soar, riding last year’s wave where a shortage of properties on the market pushed housing prices up. “All of the signs suggest that prices are likely to continue to rise until more choice is available,” Rightmove’s data director Tim Bannister explained.

However, others are a bit more sceptical. Some agents are predicting a slump after the New Year’s rush, saying that the end of the stamp-duty holiday paired with rising inflation and interest rates going up means we’re all feeling a little less inclined to spend. All of which could make for a less than buoyant housing market.

We’ll have to wait and see what the market does in the coming months. 

So, put simply, if house prices go up then borrowers’ money won’t stretch as far."

Higher borrowing potential — is it a good thing?

This January, the mortgage lender Habito has been making a splash in the headlines with a new mortgage that lets homebuyers borrow up to 7 times their income. But why is this such a big deal?

Well, homebuyers are usually able to borrow 4 or 5 times their salary – so this is a big leap. But there are a number of terms and conditions to the Habito One mortgage. Firstly, you have to take out a ‘fixed for life’ mortgage – this lets borrowers lock their monthly repayments in at the same level for between 15 and 40 years. Most people must also earn a minimum basic salary of £25,000 a year, and borrowers will need a deposit of at least 10%. In addition, any potential borrower has to work in one of a number of professions, these include: police officers, NHS clinicians, such as nurses and paramedics, and teachers in the public sector.

So, what does all this mean for potential borrowers? The good news is that those on lower salaries will find it easier to qualify for a mortgage. It’ll be simpler for buyers with a smaller deposit and could mean that borrowers can potentially afford bigger and more expensive properties. According to Helen Crane from This Is Money, this could increase the amount a single buyer earning £75,000 could afford on a home by a whopping £200,000 – which really puts things into perspective.

All this being said, some are urging caution. Habito One’s interest rates – starting at 2.79% – are higher than some of the other rates out there, which means that those mortgage repayments can be hefty. There are also fears that this might drive house prices up even higher, at a time when prices are already at record highs. “If more people know they can stretch their income multiple and borrow more, that will have knock-on effects on the housing market – a bit like with the stamp duty holiday,” Nick Mendes, mortgage technical manager at John Charcol, told The Guardian.  So, put simply, if house prices go up then borrowers’ money won’t stretch as far.

While none of us can predict what the year ahead will bring, it looks as if 2022 has started off as a big year for the housing market – both for buyers and sellers. Will this continue into the rest of the year? We’ll be keeping an eye out, and bringing you the highlights month by month.