Interest rate hike delayed | Today’s transporter
Borrowers have sought to take advantage of low interest rates, with the Bank of England keeping interest rates at 0.1% at lunchtime.
A rate hike was anticipated and many players in the real estate sector had made plans before its introduction.
LMS statistics show that instructions rose 50% in September, with 45% of borrowers increasing their loan amount in September. 1/2 of those who remortgage chose to fix their agreement for 5 years.
Commenting on the numbers, Nick Chadbourne, CEO of LMS, said
“Remortgage instructions rose 50% in September as rumors of rising interest rates loom, which could impact the cost of mortgages. Savvy borrowers near end of term current, and their brokers, will have anticipated this and have started shopping around for a longer fixed rate deal to withstand any increase in their monthly repayments.
“The number of mortgage loan completions climbed to 108% as September marked one of the highest number of ERC expirations of the year.
“As some lenders will be inundated with cases due to the current rate war, panel managers will have an important role to play in mitigating any capacity mismatches in the industry, ensuring that instructions are balanced across companies to maintain service levels. . “
Banks have also reacted in recent weeks by starting to raise their interest rates.
As of October 25, 82 fixed-rate mortgages were available between 0.84% and 0.99%, but by Tuesday, November 2 of this week, that number had fallen to 22 deals, according to Defaqto’s analysis. Last week, the average two-year fixed mortgage rate for a first-time buyer paying a 5% down payment was 2.45%. That figure jumped to 2.69% last week, the financial news site added.
In the mortgage market, figures from Twenty7Tec show that purchase mortgage research volumes are at their lowest share of the market since May 2020. Mortgage product searches in the LTV range by 95% also fell – now half the volume when the guarantee system was introduced
According to Twenty7Tec CEO James Tucker, a drop in searches for new mortgages and first-time home mortgages, which are at their lowest proportion of mortgage searches since June 2020, was unexpected. That said, the market remains busy:
“The market is changing, and fast. We should be in the midst of a home buying boom right now, as we traditionally are in the 11 weeks leading up to Christmas. Instead, the buying market is not as firm as expected, and remortgages seem to be the order of the day.
“With a decline in first-time buyer activity and a lower proportion of searches entering the 95% to 100% LTV range, we think the pre-Christmas mortgage market is slowing down a bit.
“Buy To Let remains strong, with five of the eight busiest days this year, all in October 2021. Buy To Let takes over from early buyers. “