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UK housing market hailed as ‘bouncing back’

Anyone buying property in the UK will be pleased to learn that mortgage rates have not been affected by the Bank of England’s decision to increase interest rates.

Last November, the Bank of England increased interest rates from 0.25% to 0.5%.

Testament that the rise in interest rates is having little impact on mortgages, is data from the Bank of England that in February 2018, 67,478 mortgages were approved, the highest number in six months.

Despite the rise in interest rates, mortgage rates have virtually remained static. The average fixed rate mortgage is now 1.96%, slightly lower than the average rate of 2.02% in December 2017. This compares to two years ago, when the average new mortgage had an interest rate of 2.47%.

Howard Archer, of the EY Item Club, spoke of the ‘psychological’ affect the interest rates rise has on homebuyers.

“While November’s increase in interest rates was just 0.25% and mortgage rates are still at historically very low levels, there does appear to have been some impact on house buyers’ psychology,” Archer told The Telegraph.

Economists are warning that a further two interest rate increases may occur this year. With the threat of interest rates being increased further this year, many of rushing to lock their mortgages into cheap fixed terms.

Following the Bank of England’s interest rates hike in November 2017, in December almost 40,000 people re-mortgaged to a new loan, an increase of around 41% compared to the same month the previous year.

Whether you are buying your first home, upsizing and moving up the property ladder, or investing in rental property, if you would like advice on mortgages and protection, dot financial services mortgage and protection advisers can help – get in touch today.

Your home may be repossessed if you do not keep up repayments on your mortgage.

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