Published On: Tue, Apr 9th, 2019

Surge in long-term mortgage deals should be music to your ears

Headlines declaring the surge in long-term mortgage deals should be music to the ears of those involved in the home improvement sector. Recent reports have indicated that stamp duty rises, heightened concerns about future base rate rises and widespread uncertainty, have all fuelled the growth in the market for decade-long fixed rate mortgages. Just looking at the availability of these deals is intriguing. In 2014 just 16 products were on the market with an average rate of 4.6%. Fast-forward to 2019 and you will discover 150 10-year fixed mortgages with rates now as low as 3.05%. These mortgages are often accompanied by hefty redemption penalties and often require the borrower to be tied into the deal for the term of the mortgage. When you add this to high levels of stamp duty and uncertainty surrounding Brexit, one can easily conclude that it is reasonably likely that homeowners will put off moving house in the short to medium term.

With the economy still growing, inflation flatlining and employment figures remaining static, there is further evidence that homeowners still remain in a favourable position in relation to being well placed to invest in their homes. The ten-year mortgage trend is the key indicator and one that should give the window, door and conservatory industry added confidence. At the recent Fabricator Forum organised by the BFRC the consensus was that consumer demand for new windows and doors remained high. The key driver for this demand was energy efficiency, a point that was compounded when I overheard a conversation in a local cafe: “We’ve just had our windows replaced.” “Oh that’s nice, so your house must be warmer now.” When a large national window retailer also reports that 68% of people who bought their windows do so for energy efficiency and in a GGF survey 42.15% of 4,000 consumers said they bought windows for energy efficiency, it really is an area you can’t afford to ignore. There are many challenges facing retailers and installers selling energy-rated windows and doors, as highlighted at the forum. Many homeowners believe all windows are energy efficient, so this is certainly an area that needs to be addressed when selling the benefits of higher energy-rated windows for a higher price. With security also creeping into the equation, the argument for replacing windows and doors is compelling. It will be interesting to see if domestic replacements follow the same regulatory path involving security as windows and doors have done in new-build developments. If you could gain access to the database of homeowners who have signed up to one of the 150 ten-year fixed rate mortgage deals you would be looking ahead to the next 18 months with renewed optimism! Even if this golden ticket remains elusive, I’m sure there are ways to hunt them down!!