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Mortgage rates have reached a 15-year high, overtaking the level seen during the aftermath of Liz Truss’ mini-Budget.
The average two-year fixed deal rose to 6.66pc on Tuesday morning, up from 6.63pc the previous day. It surpassed the peak of 6.65pc on October 20 last year and is now the highest since the financial crisis.
Mortgage costs have been soaring recently as lenders grapple with inflation and uncertainty over interest rates set by the Bank of England.
Markets Expect Further Rate Rises
Figures published on Tuesday show UK wages have risen at a record annual pace, fuelling fears that inflation will stay high for longer.
Traders are betting that the Bank of England will raise borrowing costs to a 25-year high by early next year, which could push average mortgage rates past 7pc.
When wage growth came in at similar levels in June, it prompted lenders to rapidly pull deals in anticipation of borrowing costs staying higher for longer.
Steps You Can Take
If you have a fixed rate mortgage that is due to end within the next 3 to 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 snd 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.
Record pay growth raises spectre of further base rate rises
UK wages have risen at a record annual pace fuelling fears that inflation will stay high for longer.
Regular pay grew by 7.3% in the March to May period from a year earlier, official figures showed, equalling the highest growth rate last month.
The pace of wage rises has come under increasing focus by the Bank of England as it tries to control inflation.
The Bank has raised interest rates 13 times in a row in an attempt to reduce the rate of inflation, but it has remained stubbornly high.
The concern is that strong wage growth will increase costs faced by companies and force them to push up prices for their goods even higher.
Analysts suggest that the figures likely mean more interest rate rises were on the cards, which could exacerbate a growing weakness in the jobs market.
Largest Decline In UK House Prices In Over A Decade
The UK housing market has encountered its most significant decrease in 12 years, with house prices falling by 2.6% within the year to June, according to data from Halifax.
This downturn occurs simultaneously with the continued surge in mortgage rates; with the average two-year fixed deal at 6.66pc as of Tuesday morning.
For sellers, a decrease in sales may lead to the necessity to reduce asking prices further than initially desired. New data from analytics company TwentyCi shows a decline in agreed sales, an increase in sales falling through, and a surge in sellers altering their asking prices.
However, given all the economic uncertainty it is remarkable how relatively stable the market appears to be following a period of unprecedented house price growth fuelled by shortage of new properties coming to the market.