The likely shape of the UK mortgages market in 2022

Harry Arnold - Anderson Harris

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Published: 18th January 2022

This Article was Written by: Harry Arnold

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Here our property finance specialists share their detailed predictions on the likely shape of the UK mortgages market in 2022. Having assessed the state of the market, here are our key findings.

2021 was certainly a good year for mortgage borrowers. Some of the fixed rates being offered were the cheapest on record and there were price wars amongst lenders, with a race to the bottom in terms of rates to attract new customers. So, can we expect the same in 2022?

Anderson Harris Director, Adrian Anderson, says:

“A lot of banks and estate agents are cautious around volumes of business in 2022, after 2021 was such a strong year – mostly because of the Stamp Duty Land Tax holiday. While 2022 will still be competitive in terms of rates, it’s unlikely to be as competitive as 2021. That said, I hear that banks are working hard on introducing new policies and improving criteria to attract new business, so there could be some interesting new products.”

Excellent news for older borrowers?

That push to attract new business could spell excellent news for older borrowers. The Office for National Statistics stated in 2020 that, “people aged in their 30s and 40s are now less likely to be homeowners than in the past.” People are renting later into life, meaning that there are now more mortgage applications from older borrowers.

From our observations, banks are still very cautions when considering lending to older borrowers. However, older borrowers are no longer necessarily retiring at state retirement age. In addition, many have other assets that could be considered when assessing affordability or how a mortgage might be repaid.

We would not be surprised to see more banks considering earned income beyond the age of 70 as 2022 progresses. We may well see lenders being a bit more flexible around how mortgages might be repaid for this cohort of borrowers.

Location. Location. Location

In terms of where people will be buying, we are still speaking with many clients who are keen to make the move to a property with more space, or one in the countryside. It seems that this pandemic-triggered desire will be with us for a while longer yet, with Omicron no doubt exacerbating this area of demand in 2022.

That doesn’t mean it’s all doom and gloom for London though. While flats in London with no outside space were notably out of favour in 2021, we’ve been working with a growing number of clients who plan to work in the capital for three days a week. As a result they are seeking a bolthole or pied-à-terre somewhere central.

Location tends to trump outdoor space for this kind of property, indicating that 2022 could see something of a resurgence for London’s property market.

We also expect overseas buyers to play a role in underpinning the London market over the coming 12 months. As Adrian summarises,

“London is a global city and relies on overseas buyers. For two years now, there have been major restrictions, which have prevented overseas buyers from visiting London and thus dramatically reduced the number purchasing homes there. Yet there is still plenty of demand from overseas buyers for residential property in the capital, as it is seen as a safe haven and attractive place to live. We anticipate more overseas buyers snapping up homes in London this year, either with or without visiting.”

What now for long-term fixed rate mortgages?

Many of those in the mortgage industry will also be keeping a close eye on the evolution of long-term fixed rate mortgages in 2022. In the current low interest rate environment, most lenders only offer competitive fixed rates for two or five years. Might 2022 be the year we start to see more competitive rates available for longer periods? Such long-term loans would certainly give banks a better chance of assessing the affordability for the borrower.

How people use their homes

The final areas to watch in 2022 will centre around the changing way people use their homes. Barclays and Metro Bank have already begun to show more flexibility in terms of allowing residential second home mortgage holders to rent their property on a short-term basis for parts of the year (subject to certain conditions).

It’s likely that more banks will be looking closely at this model in 2022, no doubt subject to certain criteria. We may see more banks offering holiday let mortgages as well, which could bring down the cost of these normally very expensive products.


2022 is going to be an interesting year for borrowers. No, rates might not be at the same historic lows we enjoyed in 2021, but there should be plenty of activity in the market and several developments that should afford buyers more choice. Watch this space!

For more information or to discuss your property finance requirements, contact our team of specialists on tel. 020 7495 6633 or email

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