What are interest and mortgage rates doing, and how are these impacting the housing market? 💹
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How are interest rate rises impacting house prices?
🔸 The Bank of England (BoE) has now raised the Base Rate 13 times since December 2021, now at 5% (up from 4.5% in May, and highest in 15 years) which means, mortgage rates have gone up too
🔸 The increasing affordability challenges of home-buyers has meant that some new home sellers have adjusted their asking price expectations (with an average drop of £905 to average asking prices this month)
🔸 Less property coming to market too, as sellers pause plans whilst assessing higher costs and budgets
🔸 For more facts and figures from the sales market, click here
❗ Overall, the rise in interest has led to a fall in average house prices, new stock levels and the number of sales agreed ❗
What’s happening with mortgage rates?
🔹 Average mortgage rate for a 5-year fixed, 85% Loan-To-Value (LTV) mortgage is now 5.69%, up by +0.49% compared to this time last month but still below October’s 5.89% following the mini-Budget
🔹 Rates expected to go higher to address inflation, but the financial markets still believe they will fall back in the long-term
🔹 This is backed up by the positive news that inflation in June fell more than anticipated
🔹 And... some lenders are cutting rates as a result (albeit very small percentage shifts)
On Tuesday 25 July 2023
❗ The average monthly mortgage payment on a First-time Buyer (FTB) type property for someone taking out a five-year fixed, 85% LTV mortgage is now £1,256, up by £32 per month compared to last week ❗
How much can you borrow with a mortgage? If you’re thinking of moving, a mortgage broker or adviser can talk through your specific circumstances to help determine the best lender for you, as well as explaining the type of mortgage that might be the best fit.
Please contact our expert emma.travers@cavendishproperty.co.uk for more information and guidance 👍
📸 Emma Travers, Property Sourcing, Conveyancing and Acquisitions at Cavendish Residential 📸
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