Mortgage Rates and Labour’s Pledges: A Warning from HSBC

The banking giant, HSBC, has issued a dire warning to homeowners regarding Labour’s economic plans. According to HSBC, Labour’s proposal for a “genuine living wage” could drive up labour costs, forcing businesses to pass on the increased expenses to consumers. This, in turn, would lead to higher interest rates, making it difficult for banks to offer lower interest rates to homeowners.

The warning comes as Labour proposes a minimum wage that takes into account the cost of living, which would extend to all adults, not just those over 21. HSBC warns that this adjustment would mean a significant rise in costs for employers, leading to higher prices for consumers and, subsequently, higher interest rates.

The Impact on Homeowners

The consequences of Labour’s plans would be felt by homeowners, who would face higher mortgage rates. This would make it difficult for homeowners to secure lower interest rates, leading to increased mortgage payments. The warning from HSBC serves as a cautionary tale for homeowners, who may need to reassess their financial plans in light of Labour’s economic proposals.

UK Housing Market: A Return to Pre-Pandemic Levels

In related news, the UK housing market has returned to its pre-pandemic size, with a total value of £342 billion. According to Savills, the market has seen a 17% increase in average sale prices, offsetting the 15% decrease in completed transactions. The agent expects house prices to grow 2.5% in 2024, primarily due to falls in the cost of mortgage debt.

The Right Mortgage & Protection Network Boosts Protection Development Team

In other news, The Right Mortgage & Protection Network has appointed Phil Davies to its protection development team. Davies will work with appointed representatives to ensure clients receive the protection advice they need. The network aims to support firms in exploring protection options and ensuring clients are fully covered for the future.