According to Jamie Alexander, a mortgage broker at Alexander Southwell Mortgage Services, recent increases in mortgage rates may have been excessive. However, he expects them to be revised downwards. Ben Tadd, a broker at Lucra Mortgages, believes that lenders have already factored in the anticipated increase in the Bank Rate from 5% to 5.25% next week, suggesting that it will not have a significant impact.
Surging mortgage rates in both 2021 and 2022 have led officials at HM Treasury to reconsider the potential benefits of adopting long-term fixed mortgages, similar to those seen in the Netherlands and Denmark. These types of mortgages offer borrowers the opportunity to pay at a single interest rate for the entire loan term, providing stability and protection against future interest rate fluctuations. They are particularly advantageous for first-time buyers.
In October 2020, at the Conservative party conference, former Prime Minister Boris Johnson expressed his desire for the UK mortgage market to expand its offerings beyond the popular two- and five-year fixed rates and introduce more 20- and 30-year fixed deals. Anthony Browne MP recently chaired a round table with members of the banking industry to explore this possibility, stating in a blog post on the Conservative Home website, “Stretched homeowners, first-time buyers, and pension funds could all benefit from this change. With rising interest rates posing a severe impact on homeowners, there is no better time than now to make this shift.”
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