Homeowners Face £13k Mortgage Shock After Reeves’s Budget
Homeowners face paying an extra £13,000 on their mortgages following Rachel Reeves’s high-spend Budget. The Telegraph has more.
Families are being warned to prepare for another five years of mortgage pain after official predictions revealed rates would jump while house prices continue to grow.
Yields on U.K. gilts – which have a knock-on effect on mortgage rates – have risen to a five-month high as investors reacted nervously to the Chancellor’s announcements.
Projections published by the Office for Budget Responsibility (OBR) said the average mortgage rate would jump from 3.7% in 2024 to 4.5% in 2027.
House prices are also expected to rise to £310,000 in 2028. The current average value of a U.K. home is £290,000, according to the Land Registry.
For those buying an average house at the average mortgage rate of 3.7%, assuming a 10% deposit, the monthly repayments would be £1,334.
But a 25-year mortgage at 4.5% on a home worth £310,000, assuming a 10% deposit, would have a monthly repayment of £1,550 – an increase of £216. This would be a difference of £12,960 in repayments over five years.
Worth reading in full.
To join in with the discussion please make a donation to The Daily Sceptic.
Profanity and abuse will be removed and may lead to a permanent ban.
Increasing mortgage rates tend to flatten the housing market and I do not see why this should be any different now. In fact with the private business sector being hammered from all sides a degree of rentrenchment is highly likely along with an increase in repossessions given the rises in interest rates.
The outlook should be described as gloomy. And not just in matters domicile.
Apologies – retrenchment.
I agree that increased mortgage rates tend to flatten the housing market – but there are also policy decisions which will reduce the private rental market. People have to live somewhere.
I know people who got caught in the negative equity trap in the late eighties and remember high mortgage interest rates with a shudder. I fear those days will return.
This rather quaint idea of mortgages and home ownership isn’t coming back. It isn’t even going to be extended by inter-generational mortgages like they tried in Japan. You will own nothing and be happy. You will be so warped by the toxicity of everyday life in concert with the toxic ‘antidepressant’ offerings from big pharma that you won’t care when it is all taken away from you. All that you love will be carried away and you won’t even remember how to love it anymore.