6 September 2023

Mortgage and Property Report September 2023

By Alex Maddox
Capital Markets Director

Welcome to the September 2023 edition of the Mortgage and Property Report. In this issue, we look at the market for long term fixed rate mortgages in the UK. We compare the supply and demand of these products in the UK to other countries and discuss the role funding and regulations plays in this.

Key Highlights

  • Unlike other developed countries, the UK mortgage market has for decades been dominated by short term fixed mortgages which customers regularly refinance for a new short-term fixed rate product
  • The dominance of these products makes UK mortgage customers much more susceptible to rate shocks and has a knock-on effect on house prices
  • High street banks are not well suited to fund longer term fixed mortgages; and regulations makes it unattractive for insurance companies to fund them, despite their similar asset and liability maturities
  • The market works very differently in other countries, where long term fixed loans are far more prevalent

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