Mortgage News

As the cost of living crisis continues to dominate headlines, data from the latest Moneyfacts UK Mortgage Trends Treasury Report shows that average mortgage rates continue to increase, with the average overall two-year fixed rate rising above 3% for the first time in over seven years.

Despite no base rate movement during April, we saw a 0.17% month-on-month increase in the two-year fixed rate average for all loan-to-values (LTVs) which has now risen for a seventh consecutive month. At 3.03% this is the highest on Moneyfacts’ records since March 2015 (3.06%) and has risen by 0.69% since December 2021.

At 3.17%, the overall five-year fixed rate increased for a seventh consecutive month, rising by 0.16% since last month and now the highest recorded since May 2016 (3.17%), having gone up by 0.53% since December 2021.

Moreover, the average two- and five-year fixed rates at 95% LTV have also risen month-on-month to 3.35% and 3.47% respectively. Not only are these average rates still lower than a year ago, but product availability in this sector has also continued to improve, rising by a further two deals this month to 369 – the most on offer since pre-pandemic in March 2020 (391).

The Bank of England has today increased base rate by 0.25%, up from 0.75% to 1.00%. We have analysed the average rates offered across savings and mortgages and considers what this decision may mean for consumers moving forward.

Nationwide’s study found 28% of respondents believed financing a deposit to be the biggest obstacle to homeownership.

Seven in ten potential first-time buyers, who were looking to purchase their property in the next 12 to 24 months, will now delay their plans due to the growing cost of living.

This is according to research released by Nationwide BS today, which surveyed more than 2,000 people who are looking to buy their first home within the next five years.

In addition to this, 28% of the survey’s respondents felt that saving for a deposit was the biggest obstacle to owning a home. In comparison, concerns over borrowing enough and keeping up with mortgage payments was the next biggest challenge for potential homeowners.

“Building a deposit remains the single biggest barrier to homeownership today, with many people starting out facing a long uphill battle to save. The rising cost of living has made this even harder,” said Paul Archer, Senior Mortgage Manager at Nationwide Building Society.

Article written by Ben Johnson at Yopa, our preferred independent real estate agents.

This article is not intended to be financial advice to any individual. The views expressed are those of the author and Moneyfacts.co.uk does not endorse the content.

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