The U.K. housing market experienced the removal of roughly 800 mortgage deals from the market last week as the nation faces growing uncertainty over interest rate hikes.
According to the data resource Moneyfacts, the number of residential mortgages on the U.K declined from 5,385 deals to 5,012 over the past week while the number of buy-to-let mortgages fell from 2,748 to 2,343. Moneyfacts also reported the average rate on a new two-year fixed mortgage rate inched up 5.34% to 5.38% over the past week while the five-year fixed rate experienced a similar uptick by rising from 5.01% on May 22 to 5.05% today.
“Borrowers searching for a new deal may well be concerned about the latest developments in the mortgage market,” said Rachel Springall, a finance expert at Moneyfacts. “Over the past few days, we have seen a few lenders withdraw selected fixed products, with some pulling out of the market, at least temporarily. Product choice has started to fall, and as may be expected, average fixed mortgage rates are on the rise.”
Simon Pittaway, a senior Economist at the Resolution Foundation, an independent U.K. think tank, faulted the Bank of England for the current crisis — the central bank raised interest rates for the twelfth consecutive time earlier this month, a span covering 0.1% to 4.5% within 18 months.
“But while interest rate rises might be coming to an end, there will be plenty more mortgage pain to come,” he said. “Two thirds of the £12 billion a year increase in mortgage costs that British households face as a result of rising rates is still to come. People moving onto new fixed-rate deals over the next year can expect to see their annual mortgage costs rise by an eye-watering £2,300 – with young families and low-and-middle-income households with mortgages facing the biggest living standards hits.”
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