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Merry Christmas (and what's in store for 2022)

Deck those halls with bows of Holy

Tra la la la la, la la la la. Sorry about that. Well, we’ve reached the end of another challenging year. Let’s hope that next year we don’t have to say the same. As the big day approaches, we wanted to take the opportunity to wish you all a very Merry Christmas and a Happy New Year. We’d also like to take the opportunity to thank everyone who we have worked with over the last 12 months and for the support and kind words we have received since we launched eddge earlier in the year.

It would be an understatement of significant proportions to say that we are all looking forward to a well-earned break and indulging in some of the Christmas traditions we all hold so dear. And we very much hope you feel the same. After all, as the star of Broadway and dramatic daytime television Angela Lansbury once sung: “We Need a Little Christmas”. Wise words Angela, wise words.

To round off the year, we thought we’d provide a little update on everything that’s happened in the world of mortgages (well, maybe not everything) this year and offer our thoughts on what the New Year will bring and, most importantly, what that means for you. Here goes.

Despite the ever-presence of Covid, 2021 has been (probably) the busiest year we have ever known in all the years we have worked in the mortgage industry. Which is very much saying something, With rates at an all-time low and the much-talked about Stamp Duty holiday, there was a huge amount of activity condensed into a short amount of time. A bit like the big man and Christmas Eve. Well, sort of.

As we (and of course every news outlet in the land) have reported a few times, rates are now moving upwards. Indeed, the Bank of England nudged Bank Rate up to 0.25% just last week, but this was broadly expected. We still believe this will not become a trend of any real concern. A gentle nudge now and then, rather than the type of shock that that poor child got when she saw mummy kissing Santa Claus. Of course, you’ve probably read more apocalyptic predictions over the last few months, but we feel like we’ve been here before. A good number of people said rates would rocket after Brexit, but that never happened. This feels the same to us.

To be fair, you could be forgiven for being mildly nervous when you read headlines about rates increasing 500% that the world is soon to end. However, whilst this is technically true (the 500%, not the world ending), the reality is that means bank rate moving from 0.1% to 0.6%. Not something to build a nuclear bunker for.

Summing that all up, we wouldn’t be surprised if bank rate ended next year at something like 0.75%. Still, in the general scheme of things, pretty low. And for house prices, we reckon we’re in for around 5% growth across the year, so nothing out of the ordinary there.

Of course, given the year we have had, mortgage lending is likely to be lower in 2022 than this year, but that’s not really anything for you to worry about. So, let’s conclude with the stuff that really matters to you.

If you’re approaching the time when a new mortgage is on the cards, our advice is to start by looking at your plans for the next 5 years and not with trying to second guess the market on rates. It boils down (ps: don’t overboil your sprouts) to the flexibility offered with a shorter-term deal against the security of a longer term one.

If you can see a situation where you may need to move house in the not-too-distant future, then a short-term deal is the way to go. But if you think you are going to be in the same place for the next five years then a five-year deal presents, we believe, the best value. The difference between rates is small and worth every penny for the security. And, of course, you’ll only pay a round of fess once.

At the highest level, our advice remains that same as it has for some time now. If you are ready to look at a new mortgage now, or in the immediate future, then it makes sense to act sooner rather than later. But, at the same time, if you’re not quite ready, don’t panic. Even when rates rise, we simply cannot see them moving far for years.

All that remains is for all of us at eddge to once again wish you a very Merry Christmas. We hope you enjoy the break. And please remember this. If you’re Driving Home for Christmas, take care on those roads. If you’re taking the Polar Express, then we hope the leaves (and snow) stay off the line. And if you’re Walking in the Air, may we ever-so-politely suggest that you put the eggnog down.

We’ll see you on the other side.

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