Some economists predict the Bank of England will raise the interest rate to as much as 5.8% by next spring.
Sales assistant Robin Price, who is on the minimum wage, has been saving up his mortgage deposit for years and thanks to that and an inheritance, is now ready to buy. But with the threat of a sharp rise in interest rates looming, he says he now feels completely lost.
Mr Price moved out of his rental property to live with his sister in Suffolk while waiting to find somewhere to buy.ini-budget offered help to first-time buyers by cutting stamp dutyBut any savings Mr Price could have made from this will be wiped out if interest rates more than double. Mark appreciates he's fortunate to be able to afford his bills and that there are those out there who will "need to choose between heating and eating" as the cost of living spirals.
The number of residential mortgages on offer by lenders fell to 3,596 on Tuesday, according to financial information firm Moneyfacts, in comparison with the 3,961 on offer on Friday when the mini-budget was announced. The overall choice of mortgages does remain a lot higher than it was during the height of the coronavirus crisis, when low-deposit deals typically aimed at first-time buyers were pulled over concerns they were too risky.
He said that "lenders are having to rethink", which might be due to cost changes, as swap rates, which mortgages use to price their products, have increased too.
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