HSBC withdraws from mortgage market

HSBC withdraws from mortgage market

UK lender HSBC has taken the decision to temporarily cease accepting new applications for mortgages. This means their entire range is unavailable to new borrowers until Monday 12th June at the earliest.

This decision has been driven by a massive wave of new applications, as buyers try and secure low fixed rate deals before rates rise. The Bank of England looks set to approve a 13th interest rate rise later this month, which will have a big impact on UK mortgages.

In this section:

HSBC has chosen to temporarily remove themselves from the market to ensure business stability. With an overwhelming demand for new mortgages, this was the best way for HSBC to manage their existing workload and customer service enquiries.

HSBC have however been widely condemned for how fast they decided to withdraw their mortgage range. Many mortgage brokers had around 4 hours’ notice, and HSBC decided to pull products in as little as 2 hours. This had a huge impact on those mortgage brokers attempting to submit applications yesterday.

HSBC is expected to return to the market next Monday (12th June 2023). It is likely that during this time HSBC will be re-evaluating their range. There is increasing pressure on lenders to increase their mortgage rates, with Nationwide already announcing an increase as of next week.

Will this affect existing HSBC customers?

If you already have a HSBC mortgage, this removal from the market will have no effect on your current mortgage. However, it would be wise for variable rate mortgage customers to brace themselves for higher repayments.

HSBC will be assessing their current mortgage offerings and how well they fit into the market. It is possible rates will climb for current customers if they are on variable, discount or tracker mortgages.

HSBC customers with a fixed rate deal should be able to avoid increasing rates for now. If your special rate period is coming to an end this year, it may be wise to consider a remortgage or product transfer. This can allow you to dodge higher rates, or you risk higher repayments when you are switched over to HSBC’ standard variable rate.

More about VARIABLE RATE MORTGAGES.

More about TRACKER MORTGAGES.

More about DISCOUNT RATE MORTGAGES.

Are HSBC likely to increase mortgage rates?

There is a good chance HSBC will choose to increase their rates following their break from the market. This could include fixed rates for new mortgages, as well as their own standard variable rate (SVR).

Tracker rate mortgage customers will also want to keep an eye out for updates from the Bank of England on the 22nd of June. On this date, the Monetary Policy Committee will review the current state of the economy and decide whether another rate rise is necessary.

Will UK mortgage rates continue rising?

Mortgage rates may not reduce significantly over the rest of 2023, but the market changes consistently. If the government reduces inflation to a manageable level, it is possible the Bank of England will lower the UK’s base interest rate.

Need mortgage advice?

If you are worried about your HSBC mortgage, or simply need some advice, speak to one of our highly skilled mortgage experts.

Our specialists can provide you with a FREE mortgage review and access to top rates from OVER 50 UK LENDERS. Whether you need a simple remortgage or your needs are more complex, our team can find the right deal and help you save time and money.

Recent mortgage news

Read more news about mortgages in the UK from our qualified mortgage specialists.

Useful resources

HSBC – Mortgage rates

Finder – Mortgage statistics

Nearly 800 mortgages pulled from UK market

Nearly 800 mortgage deals pulled from UK market

More than 400 buy to let mortgages and 300 residential mortgages were pulled by UK lenders at the start of last week. This is less than ideal news for anyone who had been planning to buy or remortgage this year, with nearly 10% of mortgage options now unavailable.

Interest rates have been steadily climbing and this combined with high inflation and house price instability has led many lenders to reconsider their offerings. Though there are less mortgages available now, there are still almost double the number on the market compared to the 2,258 on offer in October 2022.

In this section:

With house prices dropping and interest rates rising, this has caused significant instability in the UK mortgage market. With 13 consecutive interest rate rises and another likely to happen this month, lenders have decided to reassess the mortgages they are offering. Now, nearly 800 residential and buy to let mortgages have been pulled from the market.

Many lenders have pulled selected 2, 5 and 10 year fixed rate deals and several have removed themselves entirely from the market, until UK rates drop.

The main cause of rising interest is inflation. Inflation in the UK is currently 8.7%, which while an improvement on the previous rate of 10.1%, is still much higher than anticipated. Inflation did decrease in April but at a much slower rate than expected.

Increasing rates are likely to lead to payment difficulties, with rates being particularly since last years Autumn mini budget. Average rates for mortgages started to fall recently. These rates have begun increasing again as inflation failed to fall as much as expected in April.

With the government aiming for 5% inflation by the end of 2023, the main way to achieve this is through continued interest rate rises. It was previously predicted the Bank of England (BoE) base rate would peak at a high of 5.5% before decreasing. This figure is now believed to be closer to 6%, hitting this rate at the end of 2023/start of 2024.

Which lenders have pulled mortgage deals?

Here, we have a full list of lenders that have pulled mortgages and which mortgages are affected.

Buy to let mortgages – 405 mortgages pulled overall

Aldermore – All fixed rate mortgages pulled

Bank of Ireland – All fixed rate mortgages pulled

CHL Mortgages – All fixed rate mortgages pulled

Fleet Mortgages – All fixed rate mortgages pulled

Foundation Home Loans  – All fixed rate mortgages pulled

Kensington – Selected fixed rate mortgages pulled

Kent Reliance – Selected fixed rate mortgages pulled

Marsden Building Society – Selected fixed rate mortgages pulled

Precise Mortgages – Selected fixed rate mortgages pulled

The Mortgage Lender – All fixed rate mortgages pulled

Residential mortgages – 373 mortgages pulled overall

Aldermore – All fixed rate mortgages pulled

Bank of Ireland – Selected fixed rate mortgages pulled

Bath Building Society – Selected fixed rate mortgages pulled

Furness Building Society – Selected fixed rate mortgages pulled

Foundation Home Loans – All fixed rate mortgages pulled

Halifax – Selected fixed rate mortgages pulled

Hinckley & Rugby Building Society – Selected fixed rate mortgages pulled

Kensington – Selected fixed rate mortgages pulled

LendInvest – Selected fixed rate mortgages pulled

Marsden Building Society – Selected fixed rate mortgages pulled

MPowered Mortgages – Selected fixed rate mortgages pulled

Newcastle Building Society – Selected fixed rate mortgages pulled

Principality Building Society – Selected fixed rate mortgages pulled

Scottish Building Society – Selected fixed rate mortgages pulled

Tipton & Coseley Building Society – All fixed rate mortgages pulled

Will more mortgage deals be pulled?

It is possible that lenders will remove more mortgages from the market if inflation remains high, as this will continue driving up interest rates. Higher rates can make mortgages less affordable per month, and lenders will be warier to offer mortgages if the likelihood of defaulting on payments is higher.

What should I do if I was planning to buy this year?

If you were looking to buy a home or remortgage this year, there are still a wide range of options available to you. Although it may be discouraging to see such instability in the market, it can still be possible to find a great mortgage with the right advice.

Our skilled mortgage team have more than 20 years of expertise and knowledge to help you find the right mortgage and rates, no matter your situation. As specialist brokers we can help with both traditional and more complex mortgages including:

Call 0330 118 8188 today to speak to one of our expert brokers or CLICK HERE to submit an enquiry online.

Useful resources

Finder – UK mortgage statistics

Money Facts Group – Mortgage choice falls as deals are pulled from sale

Bank of England – Interest rates and bank rate

Is now the best time to switch to a fixed rate mortgage?

Is now the best time to switch to a fixed rate mortgage?

With the Bank of England likely to approve a 13th consecutive interest rate rise, mortgage rates look highly likely to increase again. The UK currently has a base interest rate of 4.5%, with this figure expected to rise to 4.75% following a review on the 22nd June.

Another base rate rise will have a big impact on monthly repayments for variable rate mortgages, tracker mortgages and more.

Variable rates climbed in popularity last year, as the gap between fixed and variable rates narrowed, leaving variable mortgages the cheaper option for many people. Is now a good to time to switch your mortgage to a fixed rate to avoid higher costs?

In this section:

There are several types of mortgage available to aspiring buyers and homeowners looking to remortgage. Which one will be the best choice depends on your own needs and circumstances. It can be helpful to speak to a qualified broker if you’re not sure which type of mortgage will be most suitable for you.

Your main choices are:

A fixed rate mortgage: this tends to be the most popular choice, with the majority of UK buyers opting for a fixed rate deal. A fixed rate can offer financial stability, as the interest paid on your mortgage will not change for a set amount of time.

More about FIXED RATE MORTGAGES.

A variable rate mortgage: the amount of interest you pay for your mortgage can vary month to month. This can be a more flexible option and allows you to benefit if rates drop in the future.

More about VARIABLE RATE MORTGAGES.

A tracker mortgage: this is a type of variable rate mortgage. The interest rate on these mortgages tracks the Bank of England’s base interest rate, with the interest you pay changing over time.

More about TRACKER MORTGAGES.

A discount rate mortgage: this is another type of variable rate mortgage. With this mortgage type, the lender will usually offer a rate that is their variable interest rate minus a set percentage e.g. 2%. This will only be for a set period of time, similar to a fixed rate mortgage.

Should I switch to a fixed rate mortgage?

Currently, the Bank of England base interest rate is 4.5%. This rate has a direct effect on variable rate mortgages as lenders will often increase their variable rates based on this figure.

Economists have predicted this rate could rise as high as 5.5% (a full percentage point higher) by the end of 2023. If this happens, variable rate mortgage holders could be left paying hundreds of pounds more for their mortgages per year.

Fixed rate mortgages can offer financial stability for years to come. You never need to worry that you will be hit with a surprise interest rate hike, as you are tied into a set rate until the end of your fixed rate period.

Here, we have the current lowest interest rates available for fixed rate mortgages in the UK (accurate as of 31/05/2023).

Mortgage lenderInterest rate (2 year fixed rate)Interest rate (5 year fixed rate)
First Direct4.64%4.29%
Halifax4.64%4.43%
HSBC4.69%4.29%
NatWest4.71%4.36%
Royal Bank of Scotland4.71%4.36%
Santander4.75%4.37%

Following last year’s Autumn mini budget, the UK was thrown into economic chaos. This had an immediate effect on mortgage rates, with the lowest fixed rates climbing from 4.06% to 5.69%.

Changing from a variable to a fixed rate mortgage

There are around 1.4million mortgage deals coming to an end in the UK this year. If you are nearing the end of a fixed rate deal, now is the perfect time to consider your options moving forwards.

It is common for lenders to allow you to lock in a new fixed rate deal within the last 3-6 months of your current deal, or they risk you moving to another lender.

The process of switching your mortgage can be far simpler with the help of a fully qualified mortgage expert. Our team have more than 20 years expertise in finding every type of buyer the best mortgages available in the UK. With a specially chosen panel including over 50 of the UK’s top lenders, we can help with:

  • First time buyers
  • Home movers
  • Remortgages
  • Credit issues
  • Self employed

You can speak to one of our specialists for a FREE mortgage review (PLUS expert advice) by calling 0330 118 8188 or CLICK HERE to find out more.

Useful resources

Financial Conduct Authority (FCA) – Switching in the mortgage market – an update

Finder.com – UK Mortgage statistics

UK interest rates rise to 4.5%

UK interest rates rise to 4.5%

There have been continuous increases to UK interest rates over the last year. This week the Bank of England has announced a 12th consecutive increase of 0.25%. Following on from the last rate rise in March, the UK now has a base interest rate of 4.5%.

The last time this country was faced with such high interest rates was following the mortgage market crisis of 2008 and the global financial crash.

Mortgage holders are now understandably worried, with many questioning how their monthly repayments and finances will be affected. With UK inflation staying firmly in double figures (10.1%), it is unlikely high interest rates will drop any time soon.

More about interest rates – Mortgage interest rate predictions UK 2023

What was announced following the Monetary Policy Committee meeting 2023?

As of 11th May 2023, the UK has the highest interest rates in the G7 (4.5% interest). This follows a vote by the Monetary Policy Committee to increase the Bank of England’s base interest rate by 0.25 percentage points.

This is due to the consistently high rate of inflation in the UK over the last year. The job of the Monetary Policy Committee is to oversee the UK economy and make changes to improve its stability. The key way to bring inflation back to a manageable level is to increase interest rates.

High interest rates should lower demand for products and services, which should in turn lower inflation. The Monetary Policy Committee (MPC) meets around every 6 weeks (8 times per year) to vote on any potential changes. The next scheduled MPC meeting is in July 2023.

What will happen next with interest rates?

It is hard to say for certain, but economists are hopeful that inflation will be brought under control by the end of 2023. If this is the case, the Bank of England should also be able to reduce interest rates.

With inflation and interest being so directly linked, one cannot be lowered while the other is at a high rate. The ideal rate for inflation in a stable economy is 2% and currently the UK sits more than 8 points higher than this. Without a significant decrease in inflation, UK residents will be left with high interest for the foreseeable future.

How will mortgage interest rates be affected?

High interest will have a big impact on a range of financial products, mortgages included. Anyone with a mortgage will have to pay interest, though the amount paid will be different depending on the mortgage type.

  • Fixed rate mortgage holders shouldn’t need to worry about raised interest rates unless they are coming to the end of their special rate period. If you still have several years of fixed interest left, it is possible rates will be far lower by the time you are switched to your lender’s standard variable rate (SVR).
  • Tracker rate mortgage holders should brace for higher repayments, as their interest rate is tied to the Bank of England rate. Any change to the BoE base rate will have a direct impact on your monthly payments.
  • Variable rate mortgage holders may see an increase in monthly mortgage payments – but this will depend on their lender. Lenders can adjust their variable rate at their own discretion, but commonly will increase or decrease based on the BoE base rate.

With interest rates climbing and the UK in a cost of living crisis, you may be worried about repaying your mortgage this year. A good option would be to consider a remortgage to a fixed rate, before rates increase any further. This would allow you to rest easily with long term security, knowing you will not be surprised by any more sudden interest rate hikes.

For qualified mortgage advice, our skilled specialist brokers are here to help. We have helped thousands of people find the right mortgage deal and can offer you a FREE mortgage review. With access to rates across more than 50 TOP UK LENDERS, we can help you save by switching your mortgage over quickly and hassle free.

Recent mortgage news

Here, we have some more news affecting mortgages and the housing market in 2023:

Useful resources

Bank of England – Interest rates and Bank rate

House of Commons Library – Interest Rates and Monetary Policy

Statista – Quarterly development of mortgage rates UK 2000-2023

Bank of England – Monetary Policy Report May 2023

Mortgage interest rate predictions UK 2023

Mortgage interest rate predictions UK 2023

Consistent interest rate increases have been a huge blow to the UK mortgage market, with the prospect of high repayments putting off many aspiring buyers.

Interest rates will always have a big impact on how much your monthly mortgage repayments will be, so it is important to keep yourself well informed. Our skilled mortgage experts have put together some key predictions about interest rates this year and how your monthly mortgage payments could be affected.

In this blog, we will explain more about how UK interest rates are decided and why this could lead to you paying more (or less) for your mortgage in the future.

Mortgage interest rates UK predictions 

With the Monetary Policy Committee (or MPC) voting to increase interest rates 11 times in a row, another rise seems very likely. The rate increased from 4% to 4.25% in March 2023, following months of economic instability caused by last years Autumn mini budget. 

It had been hoped that a fall in inflation would lead to lower interest rates in the UK – but this fall didn’t happen. Though inflation is very high it is lower now than last (it hits the highest level in 41 years back in October at 11.1%). As well as rising inflation, other factors could also cause interest rates to continue increasing, including rising unemployment and an increase in wages (national minimum wage was increased earlier this month). 

Though UK inflation did decrease slightly, it still sits at the high level of 10.1%. Generally, for the UK to have a stable economy with good growth, the rate of inflation needs to sit at around 2%. 

With a rate 8.1% higher, the Bank of England’s main way to keep the economy stable is to continue increasing interest rates. At the very least, rates are unlikely to drop from current levels much if at all for a while. 

The Bank of England rate has a direct effect on tracker mortgages and will usually cause increases in repayment costs for other variable rate mortgages too. Economic experts believe that interest rates will peak at around 5% by August 2023, meaning it could be worth budgeting a little more for your mortgage repayments this summer. 

The MPC meet around every 6 weeks (8 times per year) to vote, and their next vote is scheduled for 11th May 2023. Any changes made should come into place shortly after this. 

More information – BoE announce 11th interest rate rise 

How will UK interest rates predictions affect my mortgage? 

Whether you end up paying more due to interest rate rises will be decided by which type of mortgage you have. 

If you have a fixed rate mortgage deal, your interest rate is set for an agreed number of years. If you are not nearing the end of your fixed rate deal, you shouldn’t need to worry about higher mortgage rates yet.

Anyone with a variable rate mortgage may see a rise in costs but this will come down to what lender they are with. Lenders are allowed to adjust their standard variable rates at their own discretion. They may choose to increase rates if the Bank of England raise theirs, but they don’t have to. 

It will people with a tracker rate mortgage who will be most directly affected by any Bank of England interest rate changes. The interest charged on tracker rate mortgages tracks the Bank of England rate and changes each time it does. 

More about TRACKER MORTGAGES.

More about VARIABLE RATE MORTGAGES.

More about FIXED RATE MORTGAGES. 

Should I fix my mortgage based on predicted UK interest rates?

Switching to a fixed rate deal can be a good option if you are worried about your variable rate mortgage payments increasing. There is a range of fixed rate mortgages available with lenders adjusting mortgage offerings consistently to appeal to new borrowers.

With the help of an experienced mortgage broker, you could save hundreds of pounds per month on your mortgage – and avoid mortgage rate increases for the next few years. With the UK deep into a cost of living crisis, having set monthly repayments and the ability to budget could be a great help.

Remortgaging to a new deal can also be helpful for various other reasons including:

Be aware you could face early repayment charges for exiting your mortgage early. This is when it can be most useful to speak to a mortgage specialist for advice about your best next steps. Our highly qualified mortgage experts can compare rates and deals from OVER 50 TOP UK MORTGAGE LENDERS. This includes great mortgage deals with no exit fees attached in case you need to switch again in the future.

More about REMORTGAGES.

Useful resources

Bank of England – Official Bank Rate history

Bank of England – Statistics

Bank of England – Monetary Policy Committee dates for 2023 and 2024

Interest rates to fall says IMF

Interest rates to fall says IMF

The IMF or International Monetary Fund has announced their belief that the high interest rates in the UK will fall – and drop to pre-pandemic levels.

This is welcome news for those in the mortgage industry and of course homeowners and aspiring buyers. With interest rates having a direct impact on mortgage costs, a lower rate could mean big savings for many people across the UK.

In this blog, we are discussing the predictions made by the IMF, possible effects on mortgages and which mortgages will be most impacted.

Why are interest rates predicted to fall?

The International Monetary Fund (a United Nations financial agency) states that interest rates should fall as inflation decreases. Inflation should drop due to ‘decreased productivity’ and the average age of UK residents getting higher.

The IMF are clear that they believe the current high rates of inflation and interest rates to be temporary, as interest rates should naturally be lower in an established economy. It’s not only mortgage holders who are set to benefit from a fall in interest rates. Interest rates also affect repayments for other financial products like:

  • Credit cards
  • Car finance
  • Loans

Learn more about mortgage interest rates in our latest Mortgage Interest Rates Update (February).

Why are mortgage rates so high currently?

Interest rates are at a 40 year high in the UK, with the main cause of this being continuously rising inflation. The Bank of England (BoE) uses interest rates to try and control spiralling inflation (cost of goods and services). By increasing interest rates, demand for products like mortgages should decrease and in theory stabilise the economy.

High inflation can be put down to factors like:

  • High cost of resources like gas and oil
  • Increased cost of food and lack of supply
  • Supply chain bottlenecks
  • After effects of the Covid-19 pandemic

Which mortgages will benefit most from a fall in interest rates?

Anyone on a variable rate mortgage would likely see a big drop in the cost of their mortgage each month when interest rates fall.

If the Bank of England (BoE) lower their base interest rate, anyone with a tracker rate mortgage will see a change immediately. Tracker rates are directly tied to the Bank of England rate and will always change if it does.

Homeowners with a standard variable rate (SVR) mortgage will most likely see their rates lowered too. Lenders can change their SVR at their own discretion but will commonly adjust it in line with any changes the BoE makes to their rate.

Learn more about tracker rate mortgages.

Find out more about the latest BoE rate rise in our latest blog to learn more about this topic.

Should I switch to a variable rate mortgage?

There are pros and cons to both fixed and variable mortgage rates and which is the right choice can vary from person to person.

If you think a variable rate mortgage seems a good fit for you, speak to one of our skilled mortgage specialists to find out more. We can help you swap your mortgage over quickly and easily and can compare available rates across over 50 of the UK’S TOP MORTGAGE LENDERS.

Learn more about fixed rate mortgages.

Find out more about variable rate mortgages.

We also have more on this topic in one of our recent blogs ‘Fixed rate vs tracker mortgages update’.

Useful resources

Bank of England – Interest rates and Bank rate

House of Commons Library – Interest Rates and Monetary Policy

Statista – Quarterly development of mortgage rates UK 2000-2023

Fixed rate vs tracker mortgages update

Fixed rate vs tracker mortgages update

The Bank of England base rate has been increasing consistently, driving up monthly repayment costs for those on variable or tracker mortgages. In the last few weeks, many mainstream lenders have announced lower interest rates for selected fixed rate deals – increasing a price gap between fixed and variable rate customers.

Those looking to get a new fixed rate deal or remortgage look set to benefit from lower pricing while those on variable rates may struggle with rising costs.

In this blog, we are looking at fixed rate vs tracker mortgages, some examples of possible rates in 2023 and how you could save on your mortgage moving forwards.

Fixed vs variable rate mortgages

At the minute, fixed rate mortgages are looking to be a good choice for new buyers or those thinking about a remortgage.

Tracker rates and standard variable rate mortgages will always be impacted by any changes to the Bank of England base interest rate. As the BoE rises, the interest rate for mortgages will too, especially for trackers as these are directly linked to the BoE rate.

With many homeowners facing monthly repayments nearly 60% higher now vs last year, switching to a new fixed rate deal will certainly be an appealing option.

It used to be that the longer you fixed your mortgage for, the higher the rate of interest would be. Right now this isn’t the case, and many 10-year fixed rates currently have lower interest rates attached compared to 2 or 5 year deals.

Find out more about fixed rate mortgages.

Learn more about variable rate mortgages.

You can also read more about the latest interest rate rises in one of our recent blogs.

Which lenders have dropped the rates on their fixed rate mortgage deals?

The lenders that have recently announced lower fixed rate mortgages include:

  • Barclays
  • Coventry Building Society
  • First Direct
  • HSBC
  • NatWest
  • TSB

HSBC already cut over 100 of their mortgage interest rates back in January, and other lenders including Lloyd’s and Virgin Money introduced fixed rate mortgages at 3.99% interest in February. It was believed that other lenders would follow suit and though there has been some delay this has now occurred. Lower mortgage rates are overall positive news for the mortgage market, though it is hard to predict how long these rates will be available and if more will be introduced.

Tracker mortgage vs fixed rate: example rates

Here we have put together some examples of different mortgage rates for both tracker and fixed rate deals, so you can see the differences for yourself.

Lender2-year fixed rate2-year tracker rate
Santander4.81%5.55%
Halifax4.84%5.51%
HSBC4.84%5.25%
NatWest4.86%5.24%
Royal Bank of Scotland4.86%5.24%
Nationwide4.94%5.29%

All the rates above are based on a repayment mortgage of £150,000 over 25 years with a £15,000 (10%) deposit.

It is clear to see that fixed rates are much lower at the moment, though of course it is possible for tracker rates to drop in the future. One good thing about tracker mortgages is the level of flexibility they offer, and if the BoE rate drops in the future they could even have a lower rate than the above fixed rate deals.

Find out more about tracker rate mortgages.

Should I remortgage to a fixed rate?

If you are concerned about the rising monthly costs of your variable rate mortgage, now could be a great time for you to consider a change. You may even just want to take advantage of the possible savings from the lower mortgage rates on offer.

A fixed mortgage rate guarantees how much you will pay for your repayments each month, something that can be helpful during a cost-of-living crisis where budgets are more stretched.

Switching to a new deal could help you to avoid rising costs – and you will benefit from significant savings in many cases.

Our skilled mortgage experts can provide you with a FREE mortgage review to check if one of these new mortgages will be better suited to your needs. We can also guide you through the whole remortgage process, answer any questions you have and help you switch quickly and hassle free.

Learn more about remortgaging with our team of specialist advisors.

Useful resources

Financial Conduct Authority – Mortgage lending statistics 2023

Statista – Quarterly development of mortgage rates March 2000 – January 2023

Office for National Statistics – How increases in housing costs impact households

House sales drop nearly 40% since 2021

House sales drop nearly 40% since 2021

According to new research, property sales in the UK have fallen by almost 40% since 2021. This is due to the Bank of England having steadily increased their interest rates since then, with the rate climbing to 4.25% recently – the 11th consecutive rise.

There were on average around 72,785 property sales every month in the UK between December 2021 and November 2022.

On this page, we will explain more about why sales have dropped, and which areas have been worst affected.

Find out more about the recent interest Bank of England rate rise and its impact on mortgages and the housing market.

Why have house sales dropped?

With interest rates on a steady increase over the last year, many new buyers and home movers will have been understandably put off by higher prices.

Rates initially increased in December 2021 from 0.1% to 0.25%, before increasing again in February 2022 to 0.5%. During the course of 2022, rates continued rising and hit 3% in November. This was the largest rate rise since the late 80s and the figure now stands at 4.25%. This has led to mortgage repayments rising by nearly 60% each month for the average homeowner.

This combined with the UK cost of living crisis has seen house sales plummet over the last couple of years. The number of houses being sold each month has dropped by a staggering 23,946 properties, from a previous average of around 96,732 sales each month – a 25% decrease.

Property sale decreases by region

Here we have the main regions that have been affected by a drop in house sales, and how much sales have decreased:

  • East England – 29.8%
  • East Midlands – 25.6%
  • London – 26.8%
  • South East – 30.2%
  • South West – 29.9%

Top 10 areas affected

Here we have the areas that have been hardest by lower sales, most of which have seen property prices increase since the start of the pandemic.

  • Havering (East London) – 37.9%
  • Hamblestone (North Yorkshire) – 37.5%
  • Harborough (Leicestershire) – 38.8%
  • Maidstone (Kent) – 37.4%
  • Malden (Essex) – 39.6%
  • Mid-Suffolk – 40.1%
  • Test Valley (Andover) – 37.1%
  • Torridge (Devon) – 39.2%
  • Uttlesford (Cambridgeshire) – 39.8%
  • West Oxfordshire – 39.7%

Scotland is the least affected area in the UK, which is good news for sellers and buyers in that region.

Will property sales increase in 2023?

It is hard to say for certain when sales will increase back to previous levels. It is predicted that property prices will fall by another 10% by mid 2022, which could encourage more people to buy.

It is however also true that mortgage approvals have been reducing since the higher interest rates began. If you have been struggling to find a lender to approve your mortgage, it could be worth speaking to a specialist broker for extra help.

Our team of highly skilled EXPERTS have years of experience in all types of mortgages, from buy to let mortgages, first time buyer mortgages and more.

Learn more about the predicted fall in house prices.

Stay informed about all the latest home and mortgage news in our News & Blogs section.

Useful resources

Bank of England – Interest Rates and Bank Rate

Bank of England – Official Bank Rate history

Gov.uk – UK monthly property transactions commentary

Office for National Statistics- UK House Price Index: January 2023

Gov.uk – UK House Price Index for January 2023

UK mortgage repayments rise nearly 60%

UK mortgage repayments rise nearly 60%

The House Buyer bureau has stated that mortgage repayments in the UK could now be up to 60% higher for the average household, compared to before the interest rate increases.

With higher property prices and mortgage rates in recent years, many new buyers and home movers have been wary of joining the property ladder. It is understandable to be concerned about facing higher prices – particularly with the current UK cost of living crisis.

On this page, we will discuss why your mortgage repayments may have gone up and how likely you are to be affected.

Why have average mortgage repayments increased?

Mortgage price increases can be directly linked to the increasing Bank of England (BoE) base interest rate over the last year, coupled with rising inflation.

Lenders will generally adjust their Standard Variable Rate (SVR) based on any changes to the Bank of England rate. Those with tracker mortgages will always be most affected by BoE changes, as their interest rates are directly linked to this figure.

Learn more about variable rate mortgages.

Learn more about tracker rate mortgages.

Find out more about the Bank of England’s most recent interest rate rise (the 11th in a row).

Which mortgages are worst affected?

The mortgages most notably affected by higher repayments have been 75% loan to value (LTV) mortgages on a two year fixed rate. These mortgages have faced a 59.4% increase in repayment costs since before the interest rate rises.

In December 2021, these mortgages would have had an average interest rate of approx 1.57% with monthly repayments of around £811. Now you would be looking at rates of 5.17% and monthly repayments of £1,292 for the same mortgage with the exact same terms and borrowing details.

Learn more about fixed rate mortgages.

Which mortgages are least affected?

At the moment, those on Standard Variable Rate (SVR) mortgages have experienced the lowest price increases. These mortgages have faced a 46.2% increase in repayment costs since before the interest rate rises.

On average the Standard Variable Rate for mortgage lenders has risen from 3.61% to 6.66% across UK lenders. This has resulted in an increase of about £471 per month for most of these mortgages (repayments rising from £1,018 to £1,489 per month).

What should I do if I am worried about my mortgage?

In today’s market, borrowers are looking at price increases of up to £500 a month (£6,000 per year) for their mortgages. This means many people will likely struggle with their repayments this year.

If you are worried about affording your repayment costs in 2023, it could be worth speaking to a mortgage EXPERT for further advice. Proper advice from a specialist broker can make a world of difference and often switching to a new deal can help you save thousands of £s per year.

Our team of skilled brokers can provide a mortgage review FREE OF CHARGE to check if you are paying too much for your mortgage. We can also advise on the best rates for new borrowers and how you could consolidate debts using your mortgage.

Useful resources

Office for National Statistics – How increases in housing costs impact households

Statista – Average interest rates for mortgages in the United Kingdom (2000-2023)

Financial Conduct Authority (FCA) – Mortgage lending statistics March 2023