Sign up for our newsletter and receive free updates on Mortgages. We’ll send you a myFT Daily Digest email every morning, summarizing the latest Mortgages news.
The cost of two-year fixed rate mortgages in the UK has surpassed the previous high reached after the “mini” Budget last autumn. Lenders have increased prices in response to rising interest rates.
According to data provider Moneyfacts, the average rate on a two-year fixed mortgage hit 6.66% on Tuesday, the highest level since 2008. This surpasses the previous peak of 6.65% on October 20 last year after the “mini” Budget triggered market volatility.
These rising mortgage rates add pressure to homeowners and prospective buyers already struggling with higher living costs. Rachel Springall, finance expert at Moneyfacts, suggests that borrowers concerned about affordability may delay their homeownership plans or refinancing.
MPs on the House of Commons Treasury select committee are due to question mortgage lenders on consumer behavior, mortgage affordability and availability, and the impact on house prices.
UK house prices fell last month at their fastest annual pace since 2011, partially due to high mortgage rates. The average property price declined by 2.6% in June compared to the same month in 2022.
Although repossessions remain low, the government has agreed with British banks to wait at least 12 months before repossessing homes from borrowers who fall behind on payments. Additionally, borrowers can temporarily lengthen mortgage terms without affecting their credit ratings.
After the Bank of England raised interest rates to 5%, the highest level in 15 years, investors predict that rates will reach 6.5% by March 2023, the highest level since 1998.
Stubbornly high inflation, currently at 8.7%, suggests that the Bank of England may raise rates further. Two-thirds of economists polled by Reuters forecast a half-point rise at the central bank’s next meeting in August.
Bank of England governor Andrew Bailey and UK chancellor Jeremy Hunt have both called for wage restraint in order to combat inflation. They are committed to responsible decisions on public finances, including public sector pay, to prevent further inflation.
Denial of responsibility! VigourTimes is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
