‘May be years of oblivion’: how rising UK interest rates have affected mortgages | mortgage rates

UK house prices stalled last month after more than two years of growth, amid sharp rises in mortgage rates caused by Liz Truss’s disastrous mini-budget.

Recently installed chancellor Jeremy Hunt will outline his plans for repairing the damage in an autumn statement on Thursday. Here, three people share how the ongoing fallout is affecting their mortgage plans.

I may have to withdraw from my pension

Ross Bryant, a London firefighter, says monthly mortgage payments will be so high when he has to respond so soon that he could force his family out of the capital.
Ross Bryant, a London firefighter, says monthly mortgage payments will be so high when he has to respond so soon that he could force his family out of the capital. Photograph: Ross Bryant/The Guardian Group

Ross Bryant, a 33-year-old London firefighter who lives in New Cross and father of an 11-month-old boy, is grateful for the fact that he and his wife were able to climb the property ladder five years ago, but now finds himself “between a rock and a hard place”.

“Our 1.7% fixed rate mortgage is coming to an end, and we’re looking at our options,” he says.

“Our broker – who also happens to be a trusted friend – recently located the best deals for us, which included 5.34% fixed 5 years, 5.59% fixed 2 years, or a tracker mortgage, which come with obvious market risks. We were looking for An additional £650 in mortgage payments per month.

Then, the next day, the underlying price rose again. Combined with childcare costs of around £550 we would have to find a huge amount of extra money every month. You just wonder: Where can I go? What can I do to make it work? “

Like many other homeowners, the couple is slowly coming to terms with the realization that they may have taken on too much mortgage debt in the first place, while their borrowing costs were so low.

“We still have about £330,000 owed,” says Bryant. “We understood, of course, when we bought, that the underlying price was at historical lows and was always on the way up.

Our combined household income is between £78,000 and £83,000 per annum. My TV wife is going back to work full time in January. We were never on the bread line, we were in a really sound financial position. Now, we haven’t turned on the heating, and if we had to pay a mortgage rate higher than 6.2%, we’d be in the red every month.

“I might have to get a second job – a lot of firefighters are taking it out of necessity now. My pension contributions are huge, as are all my colleagues: £420 a month, because cancer rates among firefighters are so high. I could cancel Subscribing to freeing up monthly money, but having to sacrifice our future standard of living. The fact that many firefighters can no longer afford to live in London – it’s a bit of a mess really. It’s very likely that we’ll have to sell and leave.

“We’ve been playing for a while now, let’s wait and see what happens on Thursday [in theautumn statement]. A lot depends on that.”

“We may never be able to buy a house now.”

Rosina, a potential first-time buyer from London, had to put the purchase of her family’s first home on hold last month.

“I’m nine months pregnant, and the plan was to be out of rented accommodation by the time the baby came,” says the 33-year-old, who works in tech.

“We graduated during the first recession and only 14 years later had enough saved for a decent mortgage, £60,000.

‘We pretty much found the home we wanted, about 35 miles from London in Maidstone, Kent. But then budget threw a wrench in the works. Mortgage deals had been pulled and we hadn’t booked a viewing on this particular property.

“They’ve gone from a little more expensive to completely out of reach. A 6% mortgage rate, on the £600,000 house we were looking to buy, would mean monthly payments of about £3,000. We could never afford that.” , so we had to stop searching for the time being.”

The couple’s budget to buy a home has now shrunk to £515,000, which translates to ‘still expensive’ monthly payments of £2,619 at a rate of 5.99%.

Like many other properties in the area, Rosina says the home she and her partner were interested in has been taken off the market since the Sept. 23 mini-budget, but she hasn’t seen any property price reductions in the areas they were interested in. you’re looking at.

“We’re back at square one and good rates may not come back until the recession is over. Rents are already very expensive, and we’re very concerned about them going up further, which means we can save less. We’d probably consider moving farther south, but I’m afraid that if we don’t buy now We may never be able to do that.”

Our chain fell apart and left our plans.

Richard Price, 85, feels similarly stuck. The pensioner was in the process of downsizing and selling his home for £650,000 in the New Forest in Hampshire when a budget cut derailed his plan.

“My wife and I have found a smaller drug that we love,” Price says. “We found a buyer for our house, and the preparation of legal documents went on without a hitch, until the buyer’s short chain collapsed. The buyer took a flight, and took his house off the market given the general situation.

Since the micro budget, the uncertainty has brought the local housing market to an abrupt halt. We have one query about our home. Everyone has second thoughts, it seems.

“Normally, it’s quite a hotspot. Our agent called and suggested we cut our price by £60,000, but that would make our move uneconomical because the house we love needed some work. Our plans were abandoned.”

The price worries that the situation will not stabilize anytime soon. It may be years of oblivion for people hoping to buy or sell property in the UK. Many people will suffer great hardship. We won’t be able to move forward.”