Most UK homebuyers and owners are locking in mortgage rates as rises loom
The majority of homebuyers and owners are locking in their mortgage rates to escape looming rate rises later this year, according to the latest data.
Most new buyers – some 95.5 per cent – are taking out fixed rate mortgages, the Financial Conduct Authority (FCA) found, while the proportion of mortgaged homeowners fixing their rates is at an all-time high of 84.9 per cent.
“With further rate rises expected, we are encountering an increasing number of house hunters who want to secure a property as soon as possible and state taking out a fixed rate mortgage,” head of sales at estate agency Chestertons, Matthew Thompson, told Morning Wire
“This allows buyers to budget for their monthly expenses more easily and stay on top of their outgoings which, in times of a cost of living crisis, has never been more important.”
The Bank of England, which has sought to tackle spiralling inflation in the country, hiked its main interest rate by the highest amount in nearly 30-years last month.
Lawrence Bowles, director of research at estate agents Savills, added: “The move to lock into existing rates, which are still low in a historical context, will help to insulate the UK housing market from increasing interest rates in the short term. Especially as we expect the Monetary Policy Committee to raise rates once again later this month.”
The FCA also found that the value of new mortgage commitments made by lenders grew by 1.7 per cent to £83.9bn in the second quarter of the year. However, the figure remains 2.6 per cent less than a year earlier.