The Bank of England is set to raise interest rates to their highest level since 2008 on Thursday, this follows official data last month that showed inflation remains persistently high. This expected increase in borrowing costs marks the 12th consecutive rate hike by the central bank since it started raising rates in December 2021. This move follows similar actions by the US Federal Reserve and European Central Bank.
Economists and markets widely anticipate a quarter of a percentage point increase from 4.25% to 4.5%. With inflation in March at 10.1%, significantly higher than the Bank of England’s forecast made in February, economists believe the evidence threshold for raising rates has been met. This rate hike aims to curb stubbornly high inflation but may also have implications for the housing market and mortgage products.
Many economist believe the chances of the BoE doing anything other than raising rates by 25 basis points are very low and that the markets are indicating the same.
But it’s not all negative. Over the last month or so, we’ve seen what some have called a “mini mortgage price war”, with lenders cutting rates to compete for new business or brining new innovative products to the market.
This trend continues with the latest being Skipton Building Society who have introduced a brand new 100% Mortgage Product
The Return of the 100% Mortgage
Skipton Building Society has launched a unique deposit-free mortgage aimed at renters. Unlike other no-deposit deals, this mortgage does not require the financial backing of family or friends. Skipton’s Track Record mortgage is the first of its kind, and considers renters’ history of making rental payments. If applicants meet affordability criteria, they can access a mortgage without a deposit.
This innovative mortgage product aims to transform “Generation Rent” into “Generation Homeowner” by eliminating the need for substantial deposits. However, the interest rate for this mortgage is 5.49%, slightly higher than the average five-year fixed rate of 5%.
So if you or someone you know is a first-time buyer with a track record of paying rent and household bills, we can now offer a mortgage for up to 100% LTV, to help them into their first home.
If you are looking for help with your mortgage speak to our award winning brokers today on 0208 364 3444 or follow this link to book an appointment: https://mortgagesandinsurers.co.uk/get-a-quote/
Average UK house price fell by £1,000 month-on-month in April
The average house price fell by about £1,000 in April, following three months of increases, according to Halifax.
Across the UK, the typical property value fell by 0.3% month-on-month, taking it to £286,896 in April, Halifax said.
In cash terms, this was a £995 decrease compared with an average house price of £287,891 recorded in March.
Halifax said it expects to see further downward pressure on house prices over the course of this year, stating cost-of-living concerns and the impact of higher interest rates likely to weigh on sentiment and activity.
Approx 700,000 households missed rent or mortgage payments
An estimated 700,000 households across the UK missed rent or mortgage payments in April, according to Which?
The consumer group based the calculation on a survey of 2,000 people by Yonder, which indicated that around 2.5% of households had missed or defaulted on a housing payment in the previous month.
Missed housing payments were particularly high among renters – with around one in 20 (5.2%) renters surveyed missing a payment in the past month.
Nearly six in 10 (59%) people reported making at least one adjustment to cover essential spending such as utility bills, housing costs, groceries, school supplies and medicines in the past month.