13 Oct WHERE ARE WE NOW?
Since the announcement of the ‘mini budget’ and the disruption that has occurred in the financial markets, you are probably wondering about the position with mortgages?
Inflation was coming about already for external reasons, the debt incurred during the pandemic and support in the Ukraine war, as well as problems over the supply of fuel, in particular gas.
Unfortunately, it is reckoned that a couple of points were added to inflation as a result of the fiscal uncertainty brought about by the mini-budget, but more importantly, the unsettling of the financial markets.
This will calm down in due course and although mortgage lenders have had to withdraw several offers, because they were predicated on lower rates of interest, they will be producing new offers shortly. It is also likely that they will, be coming up with innovative schemes to ease the immediate cost.
If you are still under a fixed rate contract you will not yet feel a difference, but if you are looking for a new mortgage or renewing terms, rates are going to be somewhat higher.
Many people these days have chosen fixed rate terms, from 2-5 years and these if taken out now, can be at over 6%. However, if interest rates do come down again and a reversal of policy could have an effect on this, you would see the benefit sooner with a variable rate mortgage. The advice is to go to a good Mortgage Broker and a reputable Estate Agent can direct you to one.
The recommendation therefore is not to panic. Remember, property will always be an excellent investment and don’t be taken in by the ‘doom mongers’ who ‘predict’ a crash in prices. Property is very much in short supply and will remain so for some years to come, so demand will continue to exceed supply.