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Understanding the Differences and Benefits of Fixed and Variable Mortgages 

When it comes to obtaining a mortgage, one of the most crucial decisions borrowers face is choosing between a fixed or variable interest rate. Both options have their own unique advantages and disadvantages, making it essential for homebuyers to understand the differences between the two. In this blog post, we will explore the features, benefits, and considerations associated with fixed and variable mortgage rates, helping you make an informed decision that suits your financial goals.

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Fixed Mortgage Rates

Fixed mortgage rates refer to a type of mortgage where the interest rate remains constant throughout the loan term. Here are some key benefits of fixed mortgage rates:

a) Stability and Predictability: The primary advantage of a fixed mortgage rate is that it provides stability and predictability. Borrowers can accurately budget their monthly payments since the interest rate remains unchanged. This feature is particularly beneficial for those who prefer a consistent payment plan and want to avoid any surprises.

b) Protection against Rate Fluctuations: Another advantage of fixed mortgage rates is that they shield borrowers from interest rate fluctuations. Regardless of market conditions, the interest rate on a fixed mortgage remains the same, providing a sense of security.

c) Long-Term Planning: Fixed mortgage rates are ideal for long-term planning. Homeowners who plan to stay in their property for an extended period benefit from knowing their mortgage payments will remain unchanged, allowing for better financial planning.

However, it is important to consider potential drawbacks as well. For example, fixed mortgage rates typically come with slightly higher initial interest rates compared to variable rates. Additionally, breaking a fixed-rate mortgage contract before the term ends may result in penalties.

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Variable Mortgage Rates

Variable mortgage rates, also known as Adjustable-Rate Mortgages (ARMs), are loans with interest rates that fluctuate over time based on market conditions. Here are some benefits of variable mortgage rates:

a) Lower Initial Rates: Variable mortgage rates tend to have lower initial interest rates compared to fixed rates. This feature can be advantageous for borrowers who want to take advantage of lower rates in the early stages of their mortgage.

b) Flexibility: Variable mortgage rates offer flexibility, allowing borrowers to take advantage of potential rate decreases in the future. This option is particularly suitable for those who plan to sell their property or refinance their mortgage before the rate adjustment period begins.

c) Potential Cost Savings: If interest rates decrease over time, borrowers with variable mortgage rates can enjoy significant cost savings in the long run. This can result in lower monthly mortgage payments, allowing homeowners to allocate funds towards other financial goals.

However, it is essential to consider the potential risks associated with variable mortgage rates. As interest rates fluctuate, borrowers need to be prepared for increased monthly payments if rates rise. This uncertainty may not suit individuals who prefer a stable and predictable budget.


Choosing between fixed and variable mortgage rates is a significant decision that can impact your financial future. Fixed rates offer stability and protection against market fluctuations, while variable rates provide flexibility and potential cost savings. Consider your financial goals, risk tolerance, and the current market conditions before making a decision. Consulting with a UK Mortgage Broker can provide valuable guidance tailored to your unique circumstances. Remember, the right choice depends on your individual preferences and long-term financial strategy.

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UK house market sees ‘respite’ as mortgage rates ease

The UK’s beleaguered housing market enjoyed some “respite” as buyer activity picked up amid easing mortgage rates, according to an influential property professionals survey found.

Housing professionals said there had been a gradual improvement in market sentiment, influenced by the recent easing of mortgage interest rates, according to the December 2023 report from the Royal Institution of Chartered Surveyors (Rics).

Newly agreed sales figures also suggest a less negative market and short-term sales expectations have also risen with the year ahead and expectations are the most positive they have been since January 2022. The average time to complete a sale is also decreasing, now averaging 18 weeks, down from 20 weeks in September.

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Prices have continued to fall but the rate of decline slowed, Rics said. It forecast prices will continue to creep downwards, before stabilising by the end of the year. Professionals predicted a solid recovery in home sales volumes emerging in 2024.

New data from the Office for National Statistics published this week showed prices were down by 2.1 per cent on the year, which is the biggest drop since June 2011.

The latest feedback on house price expectations remains varied across the UK. House prices in Scotland are expected to rise in first three months of this year – the first-time that Scottish respondents’ three-month expectations for prices have moved into positive since May 2022.

This coincides with an overall improvement in sentiment within the Scottish residential market, according to respondents, which appears to be linked to the trend towards lowered mortgage rates.

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Together with Northern Ireland and north-west England, Scotland is one of the only areas of the UK where respondents expect prices to move higher over the course of 2024.

Tenants are likely to face rises of over 4 per cent over the next year as supply of rented accomodation continues to be constricted. The Rics professionals believe rental growth will average 5 per cent a year over the next five years.

Tarrant Parsons, Rics senior economist, said: “With 2023 proving to be a particularly challenging year for the UK housing market, it appears recent weeks have seen a little bit of respite emerge.

“Supported by an easing in mortgage interest rates of late, buyer demand has now stabilised, and this is expected to translate into a slight recovery in residential sales volumes over the coming months.

By David Connett

Source: i News

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As the Bank of England puts rate rises on hold, what are the ups … and the downs?

With Britain appearing to have hit peak interest rates, homeowners and buyers may feel like celebrating, while savers will be shaking their heads.

The Bank of England’s decision to hold rates at 5.25% for a second time came after 14 increases. So what does this mean for consumers? Are we likely to see more affordable mortgage deals? And can we no longer expect bumper savings rates from the banks?

What just happened?

It was widely anticipated that rates would be left unchanged at 5.25% – their highest level for 15 years.

Over the past two years, mortgage borrowers have seen the cost of a home loan spiral. At the same time, savers finally started to enjoy some decent returns after years in the doldrums. A number of accounts are currently paying more than 6% interest, particularly some of those offered by the so-called challenger banks.

But the Bank of England was keen to point out that dropping rates was not on the agenda yet. Governor Andrew Bailey said last week: “It’s much too early to be thinking about rate cuts.”

Damien Fahy, at website Money to the Masses, says that if we are at peak rates, what is important now is how long we stay there. “The worry is that most consumers seem to believe that rate cuts will be around the corner, but they are probably getting ahead of themselves,” he says.

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Are there any good savings rates?

After the highs of the summer, there has been a definite slowdown, with only a handful of providers offering fixed-rate savings bonds paying more than 6%.

But this does not mean there are no opportunities, says Sarah Coles at investment platform Hargreaves Lansdown. “We may well have passed the peak, with some of the best fixed rates gradually disappearing. However, there are still decent rates around that we’d have given our left arm for a year ago.

“So if you have savings you won’t need for the next year or so, it’s still worth taking advantage while you can,” she adds.

Fahy says people should move now to secure the best rates, as banks will not hesitate to pass on any decreases (even though many did dawdle when it came to passing on increases).

However Rachel Springall, at financial information site Moneyfacts, says challenger banks may continue to offer good deals as they aim for funding targets and not alignment with the Bank of England.

When comparing rates, considering the more unfamiliar brands is always wise, assuming they have the same deposit protections as a big high street bank, she adds.

Savers looking for a good deal may find some value in notice accounts – once they can plan how they may want to withdraw their money – which limit the number of withdrawals a year. For example, Monument Bank has increased the rate on its 35-day notice account to 5.22%.

But consumers must be able to move quickly. “Whichever deal is appropriate, they must be clear on the rules and eligibility an account sets from the outset, and need to be quick to apply for a deal when monitoring the best rates,” says Springall.

What about mortgage rates?

The cost of new fixed rates – the vast majority of UK mortgage borrowers are on this type of deal – has been falling for some time. Figures from property website Rightmove on Thursday showed the average new five-year fixed-rate deal was 5.36%, down from 5.97% a year ago. The average two-year fix is 5.81%, down from 6.22% a year ago.

David Hollingworth, of broker firm L&C Mortgages, says borrowers can now look forward with a little more confidence, but adds that we will not see a return to the rock-bottom deals of the recent past.

“Remortgage borrowers shouldn’t fall into the trap of holding off from shopping around in the hope of dramatic cuts to rates, especially as the gap between standard variable rates [SVRs] and the best rates has only widened,” he says. “Getting a rate in place well before the end of your current deal still leaves flexibility to review it if they continue their downward trajectory.

“In the meantime, having a rate ready for a smooth switch will avoid being hit by a high SVR, which could prove costly, even for a short period.”

Fahy says borrowers should be aware of lenders trying to attract them with low interest rates but “eye-wateringly high” product/lender fees. “Consider the full cost of a mortgage and, if rates remain high for an extended time, we might see more of these types of deals.”

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And pensions?

If there is an end to volatility as a result of the decision to keep interest rates on hold, pensions – which rely on market stability – could benefit, according to Becky O’Connor of PensionBee, a company that helps people combine old pension plans into one new plan.

“For those approaching, or in retirement, who have found managing their retirement and withdrawal plans stressful because of market ups and downs, this potential change in monetary policy direction might offer some respite,” she says.

“For those with money tied up in savings, it will be important to keep chasing decent rates, as high-paying accounts may not hang around for long.”

However, the good returns offered by annuities, which typically pay out a set income for life to a pensioner, may be limited.

For years, rates on annuities had been derisory, leading them to be dismissed as an option for many approaching, or in, retirement. But with higher rates came better offers.

Chris Flower, at wealth management company Quilter, says: “For retirees looking to purchase an annuity, as interest rates level off, this may mean the level of income they can secure levels off, too.”

By Shane Hickey

Source: The Guardian

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Halifax to lower five-year fixed rates

Halifax will lower select homebuyer five-year fixed rates, which includes first-time buyer, new build, large loans and affordable housing and green home products.

The changes will come into force from Monday 21 August.

An example of rate changes includes its no-fee five-year fixed rate at 80 per cent loan to value (LTV) will decrease by 0.11 per cent to 5.48 per cent.

The lender’s no-fee five-year fixed rate at 85 per cent LTV will go down by 0.12 per cent to 5.48 per cent.

Halifax’s five-year fixed rate at 80 per cent LTV will reduce by 0.11 per cent to 5.37 per cent and at 85 per cent LTV pricing will fall by 0.12 per cent to 5.37 per cent as well.

The loans are available between £25,000 and £1m.

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A positive boost for the market

Jamie Lennox, director at Dimora Mortgages, said that it was “great to see the UK’s biggest mortgage lender return with a further reduction on selected products”.

“This is a positive boost for the mortgage and property market given that markets are baking in further base rate increases following core inflation remaining sticky.

“It’s likely that the speed at which rates went up caused a firm halt in the number of new applications being received and we may now see lenders chasing their tails in the months to come to try and make up for being behind on their targets for the year. Only time will tell, but we hope to see more to follow,” he added.

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Peter Stamford, director and lead adviser at Moor Mortgages, said: “Halifax is making assertive moves to bolster its mortgage portfolio, a likely response to the subdued business volumes in recent months.

“With markets anticipating further base rate hikes due to persistent core inflation, the UK’s leading mortgage lender’s rate reductions may be short-lived. As the industry sees a slowdown in new applications, other lenders might soon follow Halifax’s lead. Borrowers should seize these opportunities, but with caution, as the financial climate remains unpredictable.”

By Anna Sagar

Source: Mortgage Solutions

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Mortgage brokers are stepping in to help customers navigate rates

There has been a rise in the number of people turning to mortgage brokers for guidance, with many customers unsatisfied with their lenders.

Deciding whether to navigate the mortgage market solo, or enlist the help of a qualified broker, is a major step when it comes to buying or remortgaging a property.

In recent times, with interest rate hikes making borrowing much more expensive than it was a year ago, the market can feel more daunting than it was during the period of ultra-low interest rates many had become accustomed to. And it seems some lenders aren’t offering as much support as customers would like.

New research from Butterfield Mortgages has found that less than half (44%) of customers are satisfied with the support and communication they received from their mortgage provider since the start of 2022, including the period where interest rates began to climb.

Meanwhile, two thirds (66%) of those surveyed said they believed lenders should offer greater flexibility in the current climate. This has led to a rise in the number of people considering using mortgage brokers, with 50% of respondents saying they are more likely to use one to help them understand the products available.

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Branching out for a better deal

Butterfield’s research also found that more than a third (37%) of mortgage customers are now more likely to look at smaller, independent and specialist lenders as opposed to traditional high street options and the big banks.

Alpa Bhakta, CEO of Butterfield Mortgages, said: “Over the past year, mortgage customers have had to grapple with a string of consecutive interest rate hikes, which is evidently creating challenges for many.

“With interest rates once again on the rise, it is increasingly important that mortgage customers feel supported by their lenders and that we, as an industry, are doing everything we can to provide the right levels of guidance, communication and flexibility amid the ongoing economic challenges.”

The latest data from indicates that the average rate for a two-year fixed rate deal is currently 6.41% across all borrower types. The three-year rate average is now 6.06%, while to fix for five years the average rate is currently 5.97%.

Of course, within these averages, there will be variations depending on the lender, any additional incentives or deals available, and your individual circumstances.

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Pros and cons of mortgage brokers

During uncertain times, and with most forecasts indicating that rates are unlikely to fall significantly in the short-term, navigating the mortgage market and securing the best deal is more important than ever.

Often, buyers and investors with more complex needs tend to use mortgage brokers to help them with their application. For example, those who are self-employed, or portfolio landlords, may use mortgage brokers to help them access the market.

One major advantage of using a broker is that they can save you time, as you will only need to make a single application, rather than potentially multiple ones to various lenders. They can also more easily scan deals across the whole market.

Mortgage brokers are also experts in the field, and can offer some much-needed expertise in the buying and financing process, which many find useful. Having knowledge of the market might mean they can find the best deal for an individual’s personal circumstances and needs.

Some mortgage brokers are able to secure more favourable rates than a borrower would if they went straight to the lender, although this is not always the case. They may even be able to reduce your product fees.

On the other hand, some lenders do not open up their offers to mortgage brokers and only offer them directly to borrowers, so it can still be worth checking you are getting the best rate.

Mortgage brokers also typically charge for their services, and this tends to be either a fixed fee or based on the total loan amount. For many borrowers, the benefits of using a broker make the fee worthwhile, but it will depend on the customer’s circumstances.

By Eleanor Harvey

Source: Buy Association

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Hope for homebuyers as rates fall on UK fixed mortgage deals

Borrowers received a glimmer of good news after average rates on new two- and five-year fixed mortgages fell for the first time since May.

News of the small falls came 24 hours after it was announced that UK inflation fell further than expected in June, which immediately prompted speculation that the Bank of England would not raise interest rates by as much as previously expected. The pricing of fixed-rate mortgage deals is closely tied to expectations of future interest rate rises.

Moneyfacts, the financial data provider, said the average rate on a new fixed-rate deal lasting for two years was now 6.79% – down from 6.81% on Wednesday. Meanwhile, the typical rate on a new five-year fix nudged down to 6.31%, from 6.33% a day earlier.

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The seemingly unrelenting rise in the cost of new deals has been piling pressure on would-be homebuyers and those whose fixed-term deals are expiring, and the new data will inevitably raise hopes in some quarters that new fixed rates may have peaked. However, it is too early to say whether these small falls are the start of a trend or merely a blip.

Fixed-rate mortgage pricing has been on a rollercoaster ride in recent months: the average new two-year fixed rate was priced at about 4.75% in late September last year, but by the start of November it had climbed to 6.47%. In the months that followed, rates gradually fell back as markets stabilised, until they were spooked once again by a smaller than expected drop in the UK inflation rate at the end of May. They then resumed their upwards march, and the average two-year rate has been edging closer to 7%.

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Wednesday’s official data revealed that the UK inflation rate eased to 7.9% in June. If the rate had stayed above 8%, some economists had suggested the Bank of England may have opted for another half-point increase in interest rates next month from the current level of 5%. However, they are now betting that a quarter-point rise is more likely.

Nicholas Mendes​, mortgage technical manager at broker John Charcol, said on Wednesday: “It will take a few months before we see any substantial decreases in fixed-rate pricing.”

However, Lewis Shaw, founder of broker Shaw Financial Services, said: “I’m going out on a limb here to say fixed mortgage rates have peaked. We may see a little shuffling around, but the continued painful increases are over.”

By Rupert Jones

Source: The Guardian

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Home sellers are still raising asking prices despite mortgage crunch

Optimistic home sellers have continued to raise asking prices this year, despite the rate crunch that has added hundreds of pounds to monthly mortgage bills.

Property listing giant Rightmove said although asking prices rose annually at the slowest pace since the end of 2019, they were still going up.

The average price of newly-listed homes coming to market rose by 0.5 per cent, to £371,907, in the year to July – and is up 2.6 per cent since the start of the year.

But many sellers are proving to be overly confident as there has been a rise in the number of properties seeing asking prices cut after they initially go on the market and fail to sell.

Buyers have been forced to lower their expectations amid rising mortgage rates that have added hundreds of pounds to the monthly cost of buying the same priced property as last year.

The hardest hit areas are those were house prices are highest and buyers most stretched.

Rightmove said prices have proved more resilient than expected, but that surging mortgage rates were now beginning to weigh on the property market.

‘While prices and sales bounced back this year much more strongly than most expected, the unexpectedly stubborn inflation figures and the surprise of further mortgage rate rises when many felt that they had stabilised, have contributed to the fall in prices and number of sales agreed,’ said Rightmove’s director, Tim Bannister.

‘The interest-rate brakes being applied more strongly to slow the economy are now beginning to bite in the housing market.’

Rightmove said that asking prices fell slightly, by 0.2 per cent, on a monthly basis, compared to zero growth in June and this was marginally below the usual stagnation seen at this time of year.

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Rightmove’s comments echo the latest survey by the Royal Institution of Chartered Surveyors, which found that buyer interest, sales and property prices suffered in June as mortgage rates continued to rise.

June saw new buyer enquiries reach an eight-month low, pointing to a ‘renewed deterioration’ in the UK sales market, the Rics said.

Meanwhile, Britain’s biggest mortgage lender Halifax revealed that house prices fell at their fastest rate in 12 years this month, dropping £7,500 on average over the past year.

Rightmove’s report shows sales agreed are now 12 per cent behind 2019’s more normal market level, contrasting with the surprisingly strong first five months of the year.

However, buyer demand has remained resilient, rising 3 per cent compared to the same period in 2019.

Rightmove said that estate agents are reporting that right-priced homes are still attracting buyers due to the shortage of property for sale compared to historic norms.

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Bannister said: ‘First-time buyers, trader-uppers and downsizers with higher deposits and lower mortgage requirements appear to be still keenly searching the market, not wanting to miss out on the right property that is not over-priced and that they can still afford.’

Bigger homes have proved harder to shift, with agreed sales for second-stepper homes and top-of-the-ladder homes some 14 per cent behind last yea cr.

In comparison, sales for smaller two-bed homes fared better, falling by a smaller 9 per cent.

‘The continuing twists and turns of persistent inflation and higher mortgage rates have posed some additional challenges for the market,’ Bannister said.

‘Agents report that some movers are pausing until there is more certainty that mortgage rates have stabilised, as well as reviewing how higher costs affect their plans.’

On a regional basis, London, the East and South East were the only regions to see prices fall compared to last year, with falls between 0.4 per cent and 0.6 per cent.

The fastest annual growth was in Scotland, where average asking prices surged by 3.6 per cent, followed by Yorkshire and the Humber with 2.1 per cent growth.

By Camilla Canocchi

Source: This is Money

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UK Mortgage Rates Reaches 15-Year High as Housing Market Slows

Matthew Ryan, head of market strategy at global financial services firm Ebury, anticipates that the central bank will hike interest rates to around 6.35% within the first three months of next year.

Mortgage rates in the United Kingdom have reached a 15-year high, adding pressure on homeowners and slowing the housing market. According to data from Moneyfacts, the average two-year fixed rate for residential mortgages has now peaked at 6.66%, a little increase from the 6.63% it recorded on Monday, July 10. Last year on October 20, the mortgage rates were at 6.65%. However, the new rates represent the highest level homeowners in the UK have seen since August 2008, during the global financial crisis, bringing mortgage costs to their highest levels for nearly two decades.

UK Housing Market Attempted a Comeback Early This Year

The country’s housing market has been on a roller coaster ride recently. After a turbulent start to the year, the market began to recover in early 2023. However, the recovery has been short-lived, as homeowners and buyers have recently faced renewed mortgage pain.

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The rise in mortgage rates in the UK is driven by several factors, including rising inflation and expectations that the Bank of England (BoE) will continue to raise interest rates to bring inflation under control. The BoE has expanded its base rate many times since December, and the central bank is still expected to increase the rates further to keep inflation under control.

Last month, the BoE hiked its base rate to 5%. The new rate marked its highest level in 13 years. Economists believe the base rate could rise to as high as 6% by the end of the year. The rate increment has caused mortgage rates to surge, making it more expensive for people to borrow money to buy a home. As a result, house prices have begun to fall, and the number of mortgage approvals has declined.

Experts Warn of Further Pain for Mortgage Holders in the UK

According to reports, experts are warning that the rising cost of mortgages could significantly impact mortgage holders. Danni Hewson, head of financial analysis at AJ Bell, an investment and stock broker company, said on Tuesday:

“Mortgage payers are marching towards fixed rate renewal dates with a sense of dread.”

She believes that the mood in the market is changing and that bad news is becoming more commonplace.

Another expert, Matthew Ryan, head of market strategy at global financial services firm Ebury, anticipates that the central bank will hike interest rates to around 6.35% within the first three months of next year.

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“Financial markets are pricing in a peak in UK interest rates of around 6.35% in the first three months of 2024, up from 5% currently,” he said.

Ryan also warned that this could have a massive impact on mortgage holders, as they will see their monthly payments increase.

What Does This Mean for Homeowners?
The rising cost of mortgages is likely to impact homeowners significantly. Those on variable-rate mortgages will see their payments increase as interest rates rise. While those on fixed-rate mortgages will not see their fees increase immediately. However, they will be locked into a higher rate when their fixed-rate period ends.

Homeowners struggling to make mortgage payments should contact their lenders for possible solutions. There may be options to help them, such as a payment holiday or a remortgage.

By Chimamanda U. Martha

Source: Coin Speaker

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Five-year mortgage rate hits 6% in yet more misery for homeowners

The average five-year fixed-rate mortgage has risen above 6% for the first time since November last year.

The typical rate across all deposit sizes was 6.01% on Tuesday, up from an average rate of 5.97% on Monday, according to financial information website Moneyfacts.

It is the highest level since former chancellor Kwasi Kwarteng’s mini-budget in November.

Meanwhile the average two-year rate nearly surged past 6.5%.

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Nearly 90% of outstanding mortgages are on fixed rates – many of which were taken out when home loans were at 2% or less.

It comes as the Bank of England pushed the UK base interest rate to 5% last month, opting for a bigger hike than most economists were expecting.

It marked the 13th time in a row that the central bank has pushed up rates, in efforts to quell rampant inflation across the UK.

The Financial Conduct Authority watchdog will hold a meeting with HSBC, NatWest, Barclays, and Lloyds for a meeting on Thursday after bankers have been accused of dragging their feet in passing on interest rate rises to savers.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Government minister Johnny Mercer said homeowners needed to ‘hold their nerve’ over inflation, telling Sky News ‘things will get better’.

Lib Dem MP and Treasury spokeswoman Sarah Olney urged the Government to do more in response to climbing mortgage rates.

She said: ‘This is yet more mortgage misery for homeowners on the brink.

‘Rishi Sunak asking homeowners to hold their nerve is sounding more tin-eared by the day.

‘It shows this Conservative Government is just totally out of touch.

‘Conservative ministers sent mortgages spiralling through all their chaos and incompetence, now they are refusing to lift a finger to help.’

By Brooke Davies

Source: Metro

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Rising mortgage costs driving house sellers to cut asking prices

Vendors are increasingly willing to accept a sizeable discount from the asking price in order to secure a sale, research has found.

Its latest research, property portal Zoopla found that nearly half (42%) of sellers are accepting discounts of at least 5% from the asking price, the highest level seen since 2018. Meanwhile, 15% were accepting discounts of at least 10% from the asking price.

Zoopla pointed to rising mortgage costs for this trend, noting that mortgage rates moving above 5% had meant a hit of up to 20% in the buying power of those looking to purchase using a mortgage.

The higher mortgage costs are leading to a drop in demand, with Zoopla data showing there were 14% fewer buyers active in the market over the last four weeks compared with the same period a year ago.

However, supply is growing, with 18% more homes listed for sale in the last four weeks compared with the five-year average.

The study also found that annual house price growth has slowed to 1.2% now, with Zoopla suggesting “a return to modest quarterly house price falls” over the second half of the year as a result of rising mortgage rates and continued cost of living pressures.

House price growth was highest in Wales at 2.5%, and weakest in Northern Ireland where prices dropped 0.8%.

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Region watch

Looking at regional differences, market activity was found to be holding up better in Scotland, the North East and London. Southern England and the Midlands have performed the worst, with Zoopla noting these were places where house prices grew the most during the pandemic.

It suggested that house prices will fall by up to 5% this year, though over the longer-term house price growth will be “ a lot weaker” due to a realignment of house prices and household incomes.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Mortgage rates testing homebuyers

Richard Donnell, executive director at Zoopla, said the resilience of the market and particularly homebuyers is being tested by rising mortgage rates.

He continued: “Modest price falls will resume in the second half of 2023 as the supply of homes increases giving buyers more choice and room for negotiation on price. We still expect house prices to be 5% lower over 2023 and there is a very substantial equity buffer to absorb price falls which are likely to be concentrated across southern England.

“Demand for homes remains but those households looking to move home in 2023 need to be very realistic on pricing and get the view of agents on where to pitch their asking price to secure a sale.”

By John Fitzsimons

Source: Your Money