Weekly Mortgage Roundup: House Prices Up, Rates to Stay Higher for Longer
This week, the Office of National Statistics (ONS) revealed that UK house prices have risen by 2.2% to £285,000 in the year to May. This marks the third consecutive month of house price increases, with prices up 1.3% on a monthly basis. The largest annual price rise was seen in Yorkshire and the Humber, with a 3.9% increase, while London experienced the largest monthly price rise of 3.9%.
Industry experts have weighed in on the news, with Atom bank head of mortgages Richard Harrison stating that the data is a good indication of growing confidence in the market. Meanwhile, Benham and Reeves director Marc von Grundherr believes that the market has maintained its momentum despite the recent general election.
UK Households Face Mortgage Hopes Being ‘Smashed’ by Little-Known £16 Debt
However, not everyone is celebrating the news. One woman, Caitlin, has had her mortgage hopes ‘smashed’ due to a little-known £16 phone debt. Caitlin, who had cancelled her direct debit for her £3.99 per month SIM, did not realise that her phone provider had accumulated a debt of £16 without her knowledge. Despite paying off the debt, the default on her credit record has prevented her from getting a mortgage.
Experts are warning that this is not an isolated incident, and that consumers need to be vigilant about checking their credit reports and paying off debts promptly.
FIBA Adds Factored to Lender Panel
In other news, the Financial Intermediary & Broker Association (FIBA) has added landlord finance specialist Factored to its lender panel. Factored allows landlords to unlock capital by selling their future rental income rights, which can be used for property-related expenses such as service charges, mortgage payments, and tax obligations.
FIBA chair Martin Reynolds believes that the Factored proposition is an interesting opportunity for landlords looking to develop their properties or add green efficiencies.
IMF Warns of Higher-For-Even-Longer Interest Rates
Finally, the International Monetary Fund (IMF) has warned that interest rates may need to stay higher for longer due to sticky inflation and political uncertainty. The IMF has upgraded its UK growth forecast to 0.7% for this year, but warns that higher services inflation and wage growth may require interest rates to remain higher to keep inflation in check.
The Bank of England’s Monetary Policy Committee is set to meet on 1 August to discuss interest rates, and the IMF’s warning is sure to be on their radar.
