Mortgage rates have reached a 15-year high, with the base rate sitting at five percent, and the average two-year fixed rate above six percent. It is reported that around one million homeowners are set to pay at least £500 more on their mortgage payments by the end of 2026.
In response to the significant rise in interest rates, the Government has launched a new mortgage charter, alongside the Financial Conduct Authority, which regulates mortgages.
It’s designed to enable lenders to offer flexible, short-term support (or breathing space) if you’re struggling with your current mortgage repayments – but not yet in arrears.
Lenders representing 90% of the UK’s mortgage market have signed up to the charter, and we can now confirm that large lenders like Santander are coming forward with new flexible options for borrowers.
Switch to interest only or increase the mortgage term
Santander has confirmed that from the 24th of July our clients will be able to reduce their monthly payments if they’re up to date with their payments and they want to:
- change from a repayment mortgage to interest only for 6 months,
- or increase their mortgage term
Switch products 6 months in advance
We also have confirmation that Santander will allow its mortgage clients to book a new deal 6 months before their current fixed rate deal ends. This will be possible from Tuesday 25 July.
All eyes on June inflation data
Average two- and five-year residential fixes held steady for the second day in a row after weeks of rises, showing signs the market is pausing ahead of tomorrow’s inflation report, according to data from Moneyfacts.
Investors will pay close attention to the June inflation data, which will be released by the Office for National Statistics on Wednesday (today).
Financial markets are betting that the BoE bank rate will hit 6.5% next March, while JP Morgan forecasts the rate could touch 7% next year.
Steps You Can Take
If you have a fixed rate mortgage that is due to end within the next 6 months, we urge you to get in touch with our our senior broker Danny O’Keeffe on 0208 364 3444.
If you get in touch with us early, we’ll be able to request a rate switch within 6 months of your product expiring. But you wont be locked in until the new deal starts. This mean we can continue to search the market to find you a better rate with your current lender or withdraw the application and resubmit with a new lender at a lower rate.
For mortgage help and advice please feel free to contact our award winning team on 0208 364 3444.
Average house price falls by £905 – Rightmove
The average price of property coming to market fell by £905 (0.2%) this month, the latest housing price index from Rightmove reveals.
However, average asking prices are still 2.6% higher than in January.
Rightmove says that while buyer demand remains resilient – 3% higher than July 2019 – the choice of available properties for sale is 12% lower than it was four years ago.
This, it adds, is proof that Bank of England rate rises are starting to ‘bite’.
Despite this, agents are reporting that right-priced homes are still attracting motivated buyers due to the shortage of property for sale, according to Rightmove.
Property professionals optimistic for 2024
Almost three quarters of property professionals are confident that 2024 market conditions will be no worse than those experienced in 2023, a new poll shows.
The webinar poll, by Countrywide Surveying Services (CSS), surveyed lenders, brokers, surveyors and other property professionals.
The findings reveal that 40% are ‘mildly confident’ that 2024 will be better than 2023. Only 6% expressed that they are ‘very confident’, with 27% expecting market conditions to be ‘much the same’.
Over 300 people actively engaged with the session, with the audience consisting of lenders, brokers, surveyors and other property professionals.