End of Council Right to Buy? Lenders Reprice Mortgage Rates Upwards

In an ironic turn of events despite the Bank of England’s recent decision to reduce the base rate to 4.75% on November 7th, a wave of major lenders have increased their mortgage rates.

This coincides with Chancellor Rachel Reeves dramatically reducing the Right to Buy discount offered to tenants purchasing their council house.

Just Days Remain to Secure a Right to Buy Discount
The government has recently announced a significant reduction to the Right to Buy scheme, making it harder for council tenants to purchase their homes.

This change will particularly impact London residents, as the maximum discount available in the capital has been slashed from £136,400 to £16,000, a reduction of approximately 88%.

To be eligible for the previous higher discount, applications must be submitted before 21st November 2024.

Lenders React to Economic Signals
HSBC, Santander, Nationwide, TSB, and Virgin are among the big names that have recently announced rate hikes.

This shift is largely attributed to the inflationary concerns sparked by the latest budget announcements, particularly the significant rises in the minimum wage and employer National Insurance contributions. These changes have raised fears that businesses might offset these added costs to consumers, influencing overall economic inflation.

The Bank of England’s rate cut, while a move towards easing, was accompanied by a cautious statement on the future pace of reductions, suggesting that further cuts would be “gradual.”

Job market data released yesterday showed an increase in UK unemployment and wage growth easing in September, but not as much as expected, which may reinforce the Bank of England’s cautious approach to future interest rate cuts

How We Can Assist
In these fluctuating market conditions, our role is to help you navigate the complexities of mortgage financing. Whether you’re looking to buy a new home or considering refinancing, our team is here to provide tailored advice.

Get in touch now on 0208 364 3444 alternatively click here to schedule a free consultation call.