Mortgage rates are set to rise further after the announcement by the Bank of England that interest rates would increase by a half a percentage point.
The rise, from 3.5 per cent to four per cent, makes the base rate the highest it’s been for 15 years – at the start of the 2008 recession. It means the average residential tracker mortgage will increase by around £50 month, or £588 a year.
Around 715,000 households in the UK have tracker mortgages. Another 1.4 million face renewing their fixed-rate mortgage at a higher rate this year, according to the Office for National Statistics (ONS).
Inflation starting to fall as mortgages go up
Economists considered the jump in the bank’s base rate ‘inevitable’ as the Bank struggles to contain inflation here in the UK. The good news is that their strategy finally appears to be working, with October’s inflation figure of 11.1 per cent having fallen to 10.5 per cent today. The Bank’s governor says he now expected the figure to come down rapidly, not that ‘a corner had been turned.’
But inflation isn’t the only thing that’s coming down. Only yesterday, Nationwide’s figures showed that the value of the average property in the UK fell for the fifth time in a row. It dropped to £258,297 in January – 0.6 per cent lower than the previous month.
Not surprisingly, the number of properties being sold has also dropped. Recessionary pressures and higher mortgage interest rates are the main culprits here. The fall of 9,000 approvals between November and December (46,000 and 35,000 respectively) is the lowest number of approvals recorded since 2009. The approvals figure is in line with a fall in the number of mortgage applications since the mini-budget introduced by the Liz Truss when she was PM.
Landlords to increase rents with another base rate hike
Meanwhile, a survey shows that landlords are intent on increasing rents if the Bank’s base rate gets to 4.5 per cent later this year.
Bournemouth-based lenders Finbri canvassed 1001 landlords for their research. More than half of those interviewed – 52.7 of landlords – said they would put their rent up to match increasing mortgage costs. A further 44 per cent of landlords said an increased base rate would prompt them to consider putting their properties back on the market. They would instead, look for other sectors to invest in, such as stocks & shares, hedge funds or even cryptocurrency.
The base rate could indeed rise to 4.5 per cent by summer this year as many analysts predict. At this moment in time though, it remains speculative.
But it’s not only higher interest rates that landlords are wrestling with – inflation is putting up prices overall, meaning maintenance costs are higher than ever before. Then there is the possibility of rent arrears and ultimately void properties as tenants fall behind with rents.
Get in touch
Keep up to date with property market news by subscribing to a free trial of Blue Bricks magazine here today. You can cancel after the trial and it costs nothing, or it’s just £9.99 if you like it and want to continue (which we’re sure you will).
It was cash buyers who made the most of the fall in property prices last month.
The cost of the average property (which is now sitting at around £281,272, according to figures from the Halifax), was 1.5 per cent lower than in the previous month. The fall brought the rate of growth of the average property down to two per cent – a decrease for the fourth month in a row. The figure has plummeted from 12.5 per cent in June this year.
Properties selling quicker than last year
Property website On the Market showed that properties were also selling faster this month. Around 60 per cent of properties which came on the market sold within the month (30 days), they reported. That compared to just 42 per cent of properties in the previous month and 53 per cent in December 2021.
Of those properties 36 per cent were purchased without a mortgage. That’s up three per cent from the previous month. The majority of cash buyers bought property in Scotland where houses and apartments tends to be cheaper than south of the border.
Buyer interest up in January after fall in mortgage rates
Figures revealed by property portal Rightmove show a similar rise, with a 55 per cent increase in buyer interest for January. It’s also four per cent higher than January 2019 – but still around 33 per cent lower than in January 2021.
Analysts attribute the increased number of buyers to the fall in mortgage rates in December. They spiked to more than six per cent after the mini-budget but have been falling since former Sunak became prime minister and are now sitting at around 5.63 per cent.
Tim Bannister, Rightmove’s Tim Bannister said he expected to see growth and a stronger property market after the spring.
“The full effect of affordability constraints and last year’s mortgage rate rises will hold back some segments of the market in the first half of the year,” he added. “But our leading market indicators may start to identify some green shoots of growth that will go on to strengthen in the second half of 2023.”
Rightmove – which base their data on sellers’ asking prices – put the average property at £362,438 – a jump of £3,301 on the previous month.
Annual property rise equivalent to year’s salary
Meanwhile, figures from Stripe Property Group, based on the latest Land Registry figures show that the rise in the cost of the average property over the past year was just £313 less than the average UK wage of £33,402. In other words, at a rise of £33,089, a property was almost equivalent to an average year’s wages.
Splitting the analysis down geographically is even more startling. To the extent that in the South West of England houses rose by £44,012 over the course of the year, while the average wage was just £30,653 in comparison.
James Forrester, managing director of Stripe Property Group, said the analysis showed him that “the hurdle to homeownership is only growing larger by the day.” To help combat this, Forrester, like most analysts is calling for the government to encourage construction companies and developers to bring more homes to the market to balance the supply and demand equation.
To stay updated with the latest news in the property world, subscribe to a free trial of Blue Bricks Magazine by clicking here. You can cancel after the trial and it costs nothing, or it’s just £9.99 if you like it and want to continue (which we’re sure you will).
House prices are now just over nine times the average salary, according to the latest ONS figures.
That’s worse than back in 1997 when the typical mortgage was 3.5 times average take home pay. Pre-pandemic the ratio was 7.9 times earnings. That was a sum that many property analysts already believed was becoming unsustainable.
And its why house prices are predicted to fall next year – especially considering the rise in mortgage interest rates and the general cost of living means householders having to dig deeper into their pockets.
Predicted falls range from five to 20 per cent
The question is though – just how much will property prices fall by? Predictions vary from five to 20 per cent. Estate Agents Savills expect a 10 per cent drop in house prices, while the government’s Office for Budget Responsibility predicts prices will go down by nine per cent. That’s just one per cent more than the Halifax, who predict an eight per cent fall. The lender’s House Price Index puts the average property at £285,579.
Analysts at Nationwide are slightly more optimistic, believing that, at just five per cent, the fall in house prices won’t be anywhere near as drastic. But they warn that once prices start levelling out, the market won’t pick up again for some time. The reason for this being the shrinking economy and an expected higher unemployment figure as we go further into 2023. Currently unemployment is sitting at 3.7 per cent but the lender predicts it will rise five per cent in 2023.
Estate Agents Knight Frank agree with Nationwide, by also predicting a five per cent drop in property prices. They blame higher mortgage interest rates discouraging buyers from going ahead.
Homeowners already cutting costs by four per cent
Towards the end of this year property portal Zoopla said it was common for sellers to reduce house prices by four per cent in order to secure a sale. This is reflected in a slowing of demand, with property sales on the portal down 28 per cent compared to the same time last year.
For next year rival portal Rightmove says it expects asking prices to fall by just two per cent. And, unlike the previous fall in house prices at the start of the 2007/8 recession it doesn’t expect many repossessions. It does, however, expect property to take longer to sell – up to 60 days, instead of just over two weeks, as in the buoyant property market of 2021.
Recently moved home owners may find it galling to see the price of their new property fall by as much as 10 per cent. But the good news is that property prices remain up to 20 per cent higher than pre-lockdown back in 2020. That means people will have enough equity in their property to withstand the plummeting values.
Private rental costs escalating
Private rental costs meanwhile, are on a completely different trajectory. These are rising at quite an alarming rate for tenants in the sector. In November the average rent went up by four per cent, for instance – that’s a record figure and one that is causing economists to warn renting is becoming unsustainable for many individuals and families.
What 2023 will bring in terms of the property market we can only wait and see.
To stay updated with the latest news in the property world, subscribe to a free trial of Blue Bricks Magazine by clicking here. You can cancel after the trial and it costs nothing, or it’s just £9.99 if you like it and want to continue (which we’re sure you will).
Kwasi Kwarteng’s ‘mini budget’ didn’t just affect the value of the pound – it also hit the property market hard, as the most recent housing statistics of that time are unveiled.
Zoopla’s House Price Index showed annual house price growth fell in October to 7.8 per cent. Quarterly growth was 0.7 per cent – its lowest since February 2020. That was just before the start of the first major pandemic lockdown. Sellers have also been accepting bids of around three per cent below their asking price.
Housing demand dropped 44 per cent in October
A drop in demand by 44 per cent compared to October 2021 also coincided with Liz Truss’s short-lived role as UK Prime Minister. Actual sales were down 28 per cent. At the time she was also confronted with escalating utility prices and a cost of living crisis. Banks and other high streets lenders responded by withdrawing hundreds of lower-rate fixed priced mortgage products. Mortgage rates also soared to more than six per cent in November.
Zoopla’s executive director, Richard Donnell, said he believed believes rates would drop to between four to five per cent at the start of next year. In their report, the property portal referred to the fall in prices as a market ‘shake out’ rather than ‘the start of a crash.’
His predictions are backed up by HMRCs house sales figures for October. These show that, despite the cost of living crisis, homeowners are still keen to move. There were, in fact, 110,850 property transactions last month – 29 per cent more than in October the previous year. The October figure is just two per cent down on September’s numbers.
First-time buyer desperation as rents increase
Although Donnell did expect growth to stop next year and perhaps even enter a negative phase. He also expected rents to increase, leading to a boost to the number of first-time buyers looking to secure themselves a step on the property ladder.
There is 40 per cent more housing stock on the market today than this time last year. However, that number is 20 per cent less than before the start of 2020.
The good news for first-time buyers is, of course, the cuts to Stamp Duty, under the ‘mini-budget’ and which current chancellor Jeremy Hunt confirmed would remain under Sunak’s government. These are no tax on the first £250,000 of a property’s value and pay 5 per cent from £250,001. First-time buyers pay stamp duty on property valued at over £425,000. They can claim first-time buyers’ relief on properties valued at up to £625,000.
Strong rental market tempting investors
The UK rental market is particularly strong at the moment, tempting more property investors back into the buy to let sector, according to a survey by bridging finance broker Finbri. Void periods for landlords are down while yields are increasing.
At the moment the typical yield in the UK a landlord can expect is around 4.7 per cent. Some locations though are expected to fare better than others. These include busy cities, such as Aberdeen, Liverpool, Reading and Bolton.
To stay updated with the latest news in the property world, subscribe to a free trial of Blue Bricks Magazine by clicking here. You can cancel after the trial and it costs nothing, or it’s just £9.99 if you like it and want to continue (which we’re sure you will).
House prices are no longer rising, according to the latest RICS Residential Survey.
Basing its findings on October’s results, the report states that mortgage interest rises have resulted in potential buyers stalling. Around two per cent of surveyors – especially those in the South East of England and in East Anglia – said they’d even seen property prices fall.
The number of buyer enquiries has also dropped – for the sixth month in succession. The length of time taken to sell the average property is also up two weeks; 18 weeks rather than 16 weeks is the new norm.
The majority of estate agents now believe that prices have peaked and can only go down. But that’s not unreasonable, many insist, especially when you consider they increased by around 25 per cent during the pandemic years.
Tenant demand grows
Nearly half (46 per cent) of surveyors noted an increase in demand for rental properties in October. They predict rents will rise by around four per cent by the same time next year.
Simon Rubinsohn, RICS’ chief economist, said: “Realistic pricing is now much more important to complete a sale…As far as the lettings market is concerned, the imbalance between demand and supply still appears unusually extended, leading to rent expectations in the survey remaining at elevated levels and it is difficult to see this changing any time soon in the current environment.”
Estate agents Foxtons recently revealed their average rental in London was costing tenants £553 a week – with around 29 tenants all competing for the same property. In Central London weekly rentals were costing around £636 per week.
Private individual landlords make total of £40 billion
Meanwhile, HMRC have recently reported their rental income statistics for the period 2020-2021. A total of 2.74 million unincorporated landlords declared income from property; the vast majority of unincorporated landlords being in London (16 per cent). They made the most money from renting out property (£10 billion) with landlords in the South East making £8 billion. Landlords in the East of England and South West both made around £5 billion from their property interests.
Around 99 per cent of landlords were individuals declaring property income as part of their self-assessment tax return. That resulted in a total property income figure of £40 billion.
The average income for renting out property for the period 2020-2021 was £15,000. That was drop of £2,000 compared to 2016-2017. But, 2020-2021 was the first year in which the pandemic began to have an effect on income.
Housebuilders also feel the property pinch
Housebuilders were also being impacted by rising mortgage interest rates and the mini-budget. Persimmon completed 9,974 home sales from 6 June to 6 November. That was around 800 fewer than the previous year. Cancellations had jumped from 21 per cent to 28 per cent following the mini-budget. At the same time, the average selling price per property was down by around two per cent.
Both the Nationwide and Halifax building societies reported house price falls last month – by 0.9 per cent and 0.4 per cent respectively.
To stay updated with the latest news in the property world, subscribe to a free trial of Blue Bricks Magazine by clicking here. You can cancel after the trial and it costs nothing, or it’s just £9.99 if you like it and want to continue (which we’re sure you will).
Property conveyancers were this week officially warned to brace themselves for a big fall in transactions.
The Council for Licensed Conveyancers (CLC) told members to expect up to a 40 per cent fall in business over the next few months.
Growing mortgage interest rates, a reduction in the number of mortgage deals available and fewer properties coming on to the market have all been blamed for the reduction by the Conveyancers body. Added to that is the rise in the cost of living, particularly food costs and escalating utility bills.
Conveyancing process still dragging down house sales
One mortgage broker countered the CLC claims, saying that the number of re-mortgages was rising and that many delays were often due to a slowdown in the conveyancing process itself.
So far mortgage interest rates have reached six per cent but the Bank of England base rate is expected to continue to rise above its current 2.25 per cent, pushing mortgage payments even higher. Average two-and five-year fixed rates are sitting at 6.55 per cent and 6.43 per cent respectively. Those are the highest mortgage interest rates since the beginning of the last big recession back in 2008, but economists are bracing themselves for another bank rate rise at the start of November.
Mortgage interest rates rising globally
The rise in interest rates were exacerbated by the Mini Budget introduced by then PM Liz Trust last month. They have started to fall slightly with the news this week that Rishi Sunak was to become the new PM. But it’s not just in the UK that mortgage interest rates have been rising. It’s become more of a global issue, prompting central banks in America, Australia, and other first and second world economies to increase bank rates to fight inflation.
Some housing market analysts are more optimistic about the property market than many economists. That’s because they say there are several points worth noting in its favour. This includes the expansion of the stamp duty threshold, which will help some individuals and couples – especially first-time buyers who don’t have to pay any stamp duty on property worth up to £450,000. A shortage of stock will continue to keep prices high, as will the fact there just aren’t enough New Build’s being put up to cope with demand.
Buy to let landlords not as badly hit
Many landlords may weather the rising mortgage interest rate storm by putting up rents. That’s providing tenants don’t default on payments because they are already having difficulty paying rent and buying food etc due to rising living costs.
The rental market is also expected to swell over the next few months. That’s because rising mortgage interest rates is expected to encourage first time buyers to wait before purchasing a property. That’s to see if house prices will fall, but mainly to give them time to save for a bigger deposit.
Other landlords – many of whom don’t pay self-assessment tax because they are registered as a limited company – can claim back the mortgage interest payments against their corporation tax bill.
To stay updated with the latest news in the property world, subscribe to a free trial of Blue Bricks Magazine here.
The magazine has a national following among property investors and developers and it contains features on things like how to scale your portfolio, and how to save money. For example, our accountant shows you how to tax effectively operate your portfolio and we have an estate planner who demonstrates how to cost-effectively pass your properties to your children.
Thousands of pounds of business have been passed and saved at our events, and you can attend those for free too.
Start your free trial by clicking here. You can cancel after the trial and it costs nothing, or it’s just £9.99 if you like it and want to continue (which we’re sure you will).
Buy to let investors, first time buyers and private home owners in England and Northern Ireland will make savings from the recent revision to Stamp Duty thresholds.
The increased threshold to £250,000 – up from £125,000 – has been welcomed as a slight boost to the market. First time buyers can look forward to an increased threshold of from £300,000 to £425,000). They can also buy a property up to the value of £625,000 and still claim relief (that’s an increase from £500,000 previously). Unlike his cut to the 45 per cent higher earner’s tax rate (which has subsequently been reversed), the public did welcome this part of the new chancellor Kwasai Kwarteng’s ‘mini budget.’
Buy to let landlords still pay additional three per cent
According to its UK House Price Index report for September, rival portal Zoopla said the cuts would affect 43 per cent of properties on its site (ie the properties would be Stamp Duty-free). Although, of course, buy to let landlords and second home owners in general will still have to pay a three per cent Stamp Duty cost.
After doing some calculations Rightmove executives said around 45 per cent of the houses and flats for sale on their property portal were already exempt from Stamp Duty – even before the increased thresholds were applied.
North of England to benefit most from Stamp Duty changes
Areas where property prices are least expensive, such as the north of England, will benefit most from the cuts since they’ll make the properties more affordable. The north of the country – together with the Midlands – is already enjoying the fruits of relocation. With more jobs moving to Manchester, Leeds, Birmingham and Liverpool, there’s a bigger demand for properties in these busier cities. Buy to let investors were benefiting in particular, thanks to high yields.
Many analysts are predicting a property crash of up to 15 per cent next year as grocery price hikes and the impact of rising energy bills on household finances really take hold. Rising mortgage interest rates will add to the unaffordability of moving home.
Large variations in salary percentages for housing
One recent lender – Nationwide – pointed out that the average UK property works out at almost seven times the cost of the average take-home pay for individuals. That works out at 40 per cent per month of a salary going towards housing costs. Variations are wide though – in the city the figure is around 64 per cent (or 11 times the average take-home pay), whereas in the north of England, housing payments take up just 26 per cent (4.5 per cent) of a salary.
As the markets went in to turmoil this week, lenders withdrew hundreds of mortgage products. The result was many house sales fell through as buyers panicked over rocketing interest rates. After the chancellor’s U-turn on the higher tax earning rate, the panic began to subside and rates fell slightly. What will happen next with the economy as this new government attempts to make its mark is anyone’s guess. But one thing is for sure, it’s not going to be even sailing for some time to come.
To stay updated with the latest news in the property world, subscribe to a free trial of Blue Bricks Magazine here.
The magazine has a national following among property investors and developers and it contains features on things like how to scale your portfolio, and how to save money. For example, our accountant shows you how to tax effectively operate your portfolio and we have an estate planner who demonstrates how to cost-effectively pass your properties to your children.
Thousands of pounds of business have been passed and saved at our events, and you can attend those for free too.
Start your free trial by clicking here. You can cancel after the trial and it costs nothing, or it’s just £9.99 if you like it and want to continue (which we’re sure you will).
The cost of the average property in the UK last month was £294,260, according to Halifax’s records.
That was a jump of 0.4 per cent on the previous month, but down 0.5 per cent on typical monthly prices rises. Annually the rate of growth has fallen from 11.8 per cent in July to 11.5 per cent in August. Having said that, property has still increased by £30,000 over the past 12 months. Over the past decade the price of your typical property has actually increased by an astounding 60 per cent.
Today’s slowing down and falling of average growth points very much to the cost of living crisis beginning to hit in the UK. Certainly, the country now expects to go in to recession soon.
The Bank of England’s monetary policy committee is expected to raise interest rates again when it meets later this month. The current base rate is at 1.75 per cent – the highest since 2009 – and economists predict it will rise by another 0.5 per cent in September. This is in response to spiralling inflation, with some analysts fearing it could rise to more than 18 per cent by January 2023.
Meanwhile, the energy cap rise is expected to reach £2,500 in October – hitting both householders and businesses (leading to unemployment fears).
The increasing rise in mortgage interest repayments is prompting many in the property industry to advise re-mortgaging as soon as possible – before those monthly payments become unaffordable.
Barratt’s home reservations beneath pandemic levels
Even the country’s major housebuilder Barratt Developments said it expected house prices to fall. This was in response to a slowing down of the number of house reservations – to the extent it’s less than before the pandemic hit.
In contrast to the expectation of falling house prices and a forthcoming recession, good news comes in the form of ‘digitalisation of the house buying and selling process.’
Land Registry to undergo ‘digital transformation’
Land Registry has announced plans to bring the process more up to date and fit for ‘a paperless and much more transparent society.’
Their three-year business plan focuses on five key areas –
Secure and efficient land registration
Buying and selling of property to be achieved digitally
Providing real time information
Making digital register info more accessible
Work with the property market to look at innovation
In effect then all property applications to the Register are to become digital by the end of this year. The need for digitalisation of the buying and selling process was clear after it emerged it took 49 per cent longer to complete housing transactions last year than in 2007.
In terms of ‘real time information,’ Land Registry says all local land charge data will be online by 2026 while the Registry itself is to become ‘more accessible and easier to use.’
Timothy Douglas, Head of Policy and Campaigns at Propertymark, said: “The technological mindset of consumers has advanced considerably in recent years, and HM Land Registry’s 2022+ strategy compliments moves we are seeing in the sector to enhance and improve home buying and selling.”
More rental properties are available in the capital, resulting in a lowering of monthly rents, according to one leading estate agent.
There are in fact 60 per cent more rental properties advertised in London this month – nearly a quarter more than there was at the start of the pandemic. That’s still 40 per cent fewer than the same time last year (when many tenants moved home). At that time, owners of holiday lets also turned to long-term renting following the effective closure of the tourist market.
Rental income falling in the capital
The data, from Chestertons estate agents, also revealed that many rental properties were from ‘accidental landlords.’ These could be buy to let landlords put off by the low selling prices in the capital. They could also be couples looking to save money by co-habiting and renting out the other property.
The result is the increase in supply is expected to flatten rental prices in the city.
House price drops of seven per cent by 2024
At the same time, homeowners can expect the value of their property to plummet over the next couple of years. Experts began to speculate last week following the latest Office for National Statistics figures, which showed a five per cent fall in house price growth between May and June. Despite this, the average UK house price was £286,000 in June – £20,000 higher than the same time last year.
The predictions are for a seven per cent fall in property prices over the next two years. This is fuelled by expectations that the Bank of England will increase interest rates to 3.75 per cent in April next year. It is currently sitting at 1.75 per cent. In London and the South East – where prices are highest compared to average incomes – the price drops are likely be even more severe. There the price of property could fall by as much as 12 per cent.
Gazumping on the rise
Rightmove recording a drop of £23,000 in asking prices for
property in London this month. The result has been an increase in gazumping tactics, according to several estate agents in the capital.
One conveyancer, from the capital’s Osbornes Law firm said this form of ‘price chipping’ pointed to a weaker market – one that was already swinging from seller to buyer.
A shortage in the number of homes for sale is continuing to support the property market’s frenetic activity but higher mortgage interest rates and increasing inflation is expected to slow things down considerably. To the extent that next year is expected to show the slowest property market activity in over a decade.
But it’s not all doom and gloom. Anthony Codling, of property website Twindig, tempered pessimistic attitudes by reminding the doom-mongers: “We tend to overestimate the likelihood of bad things happening. House prices have fallen in only 16 out of the last 91 years.
‘Increasing living costs and rising mortgage rates are likely to temper house price growth…once we have won the war on inflation we can expect prices to continue to rise.”
The property market continues to flourish as would-be buyers rush to settle purchases before mortgage interest rates rise further. And chains continue to fall apart as gazumping flourishes and desperation rises.
And it’s not just the buyers who are desperate – conveyances too are turning away work, unable to cope with the demand, according to one recent property analyst.
Country and Seaside slowdowns
Last year’s hot spots such as countryside villages and seaside retreats are still popular but, as one Cornwall estate agent put it: “the froth is coming off the market.”
Truro estate agent Duncan Ley said: “It’s a lot less frantic than it was — where you’d get ten competing bids on a property last year, there’s now maybe two or three, and surveyors are being a lot more conservative about values.”
Neighbouring Cornwall estate agents report similar, saying poor or overpriced properties are being left – unlike last year when ‘pretty much anything went.
And it’s a similar story in Norfolk where demand is definitely falling, according to one estate agent in Burnham Market – to the extent it’s “pretty much a trickle.”
Property reductions appearing in South East
Those looking for price reductions though, would be better heading north where property purchasers HBB Solutions say the biggest property price discounts are in the North West, West Midlands, Yorkshire and Wales. But further south there’s the appearance of shifting prices too. In the South East, for instance, one in four properties have reduced their asking price.
‘Secret sales’ on the up
Property analystists TwentyCi expect 18,600 more properties than last year to be sold privately ie without being publicly advertised. And it’s not just million pound properties either – a lot of estate agents already have lists of ready buyers fed up with being previously gazumped and willing to go above the asking price.
Rightmove’s latest figure show the average home asking price dropped by £4,795 for the first time this year. It brings the asking price of the typical property in England and Wales to £365,173. That was a drop of 1.3 per cent between July and August.
Executives at the property portal attributed to fall to the summer holiday period, insisting the market would finish with seven per cent year-on-year growth by December this year. But other property onlookers believe it’s more than that. They insist the speedy rise in the cost of living is beginning to take effect.
New mortgages costing more than old
The Bank of England’s base interest rate rise this month was the largest increase in 27 years. For the first time in almost a decade the typical interest rate for new mortgages is higher than for existing mortgages.
Lending rates have risen from one per cent to four per cent within the past year – substantially increasing monthly mortgage costs for many borrowers.
When rates have risen this dramatically in the past it has been during a period when the property market was extremely slow.
However, responsible lending this time round (compared to the 2007 recession) means many homeowners haven’t over-stretched their budgets, insist analysts. That means we’re not expecting too many repossessions.
We use cookies to enhance your experience while using our website. If you are using our Services via a browser you can restrict, block or remove cookies through your web browser settings. We also use content and scripts from third parties that may use tracking technologies. You can selectively provide your consent below to allow such third party embeds. For complete information about the cookies we use, data we collect and how we process them, please check our Privacy Policy
Youtube
Consent to display content from - Youtube
Vimeo
Consent to display content from - Vimeo
Google Maps
Consent to display content from - Google
Our website may use cookies to personalise the experience. By using this website you agree to use of cookies.OKPrivacy
