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A typical two-year fixed mortgage deal now has an interest rate of more than 6.0 per cent for the first time since December according to independent data service Moneyfacts.
Lenders have been withdrawing and re-pricing deals frequently in recent weeks, meaning new landlords or those seeking to re-mortgage face significantly higher costs.
Yesterday the average rate for a two-year fixed-rate mortgage stood at 6.01 per cent: although the peak seen after Liz Truss’ disastrous mini-budget last October was 6.65 per cent, that fell below 6.0 per cent just before Christmas and then dropped further in the New Year.
However, rates have climbed sharply in recent weeks and a typical five-year fixed rate is now at 5.67 per cent.
Buy to let rates grew even faster yesterday, with two-year rates up from 6.21 to 6.3 per cent and five-year rates up from 6.17 to 6.23 per cent.
Meanwhile a data platform - Moneyhub Decisioning - says its research shows that a quarter of homeowners with a mortgage said that a further interest rate rise would mean they won’t be able to afford their mortgage payments.
In addition, a third of homeowners with a mortgage said they were concerned that they will not be able to afford their mortgage when they re-mortgage due to rising rates.
It’s estimated that 1.4m people in the UK are set to re-mortgage in 2023 alone and with 1.5m estimated to be on standard variable rates and a further 85,000 with trackers, there are concerns of growing debt if rates rise further.
This research comes after numerous predictions the Bank of England’s Monetary Policy Committee is set to raise the base rate again on Thursday this week.
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Just adds to the overall problems with not just the BTL market but those attempting to buy their first home, I really do see repossessed properties coming on in a year or so as these cheap fixes end this year 😰
We are definitely on a knife edge here. Let's see what the Bank of England does next and we need to see the figures on inflation.
As always winners and losers when there is instability. I've said before if you need to sell you'll have to really drop the price.
Despite the economy many Landlord's including myself will want to leave!
I can see lots of downsizing in assests as those with the big houses, especially those in overley inflated priced new builds on very low rates coming to an end not being able to make ends meet.
The lower end of the market should stay stable and buoyant due to this and investments will be in this end of the market.
I feel It will be the safest place and most affordable to buy for families and for investors for the foreseeable future.
Sorry I can’t offer a more, in depth, critical and level headed analysis other than, this country is shagged isn’t it?
Fully agreed Steven, starts at the very top...
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