Blog: Delivering Value to Homebuyers in Financial Struggle


The Chancellor’s spring statement served to further reiterate the dire financial difficulties many are facing as their money is stretched harder than ever. At a time when absolutely every penny counts, there is a real need for advisors to help their clients make the best decisions possible for them.

In the space of just a few months, the Bank of England has already raised interest rates three times, the last time to 0.75%. The Bank now expects inflation to hit 8% later this spring, and the OBR expects it to average 7.4% this year, so further Interest rate hikes are expected. For potential buyers and those looking to remortgage, this will have a costly ripple effect, as cheap fixed rate deals will become that much harder to find. Obtaining the best value for money will become of paramount importance and advisors are in the best position to help their clients achieve this.

Some customers will have found the right time and will be relieved to have already secured a fixed term mortgage, but there will be many others who will worry that they won’t be able to get an affordable fixed rate or that their current fixed rate will arrive soon. come to an end and they face the prospect of significantly higher costs. In this case, advisors have a real opportunity to step in to help their clients and bring them real value by helping them understand the options available to them and helping them make the best possible choice based on their situation.

While house price growth has slowed in recent months, they have yet to start falling. The latest government house price figures showed there was a monthly increase of 0.7%, with the average UK house price £24,000 higher than the same period last year.

For first-time buyers in particular, such increases represent an ongoing struggle. Just as they manage to save enough for a deposit, the cost of their first home once again climbs out of reach. Plus, skyrocketing inflation means savings accumulated for a deposit will be permanently eroded, making it even more difficult for first-time buyers to make that first move. Advisors can bring significant value to first-time home buyers by helping them ensure they are financially prepared and resilient enough to embark on their first home purchase.

While the real estate market has remained frantic so far, there are a host of things currently at play that could trigger a decline in house prices – albeit slowly. The prospect of rising inflation and rising interest rates, coupled with high energy costs, a deepening cost of living crisis and uncertainty surrounding war in Ukraine, may well cut the veils of the market and cheap mortgage offers will probably disappear.

Although the Chancellor has announced a number of welcome measures, they will not entirely remove the financial sting felt by many. The prospect of weakened financial stability will no doubt make potential buyers think twice before embarking on the costly process of moving house, which could lead to lower house prices. However, as there are still supply versus demand issues, a decline in home prices would likely be slow and may not materialize for a few months. So those who need to remortgage or move sooner will no doubt feel the financial pressure to do so and will need the support of their advisor to navigate the process.

The past two years have been anything but predictable, and so far 2022 seems to be following suit. Although the housing market has been resilient throughout, the current circumstances may ultimately prove too burdensome and clients will depend on the expertise of their advisor to help them through this period.

Charlotte Nixon is a mortgage expert at Quilter

Previous One to One: Charles Roe, Director of Mortgages, UK Finance
Next Strong increase in the number of BTL green mortgages