In recent months, in order to control inflation , the Bank of England has been on the road to hiking interest rates and hiking hiking again...
This has also caused the UK loan interest rate to continue to rise.
In the past week or two, at least 1,600 loan products have been withdrawn from the market. Many banks are worried that interest rates will rise sharply, so they directly withdrew many loan products, which has also made many first-home buyers with insufficient funds miserable.
Not long ago, Fiona Bruce, the host of the BBC program, interviewed Paul Scully, the Minister of Local Government and Community Affairs, on recent hot issues.
On this show, a live audience named Rabia bluntly pointed out:
I want to know, what is the plan for the loan interest rate?
2 weeks ago, they told me that my fixed loan interest rate was still 4.5%.
So I went home to sort out all the files, and after confirming that it was correct, I submitted the materials.
As a result, the other party told me directly that the loan product was cancelled. The best loan product I can find now has an interest rate of about 10.5%.
As a first-time home buyer, I really can't afford this loan.
interest rate increased from 4.5% to 10.5%, which is really a huge increase.
What is this concept? As shown in the figure below: the amount of the loan, 2.4% interest and 10.5% interest, how much does it cost to pay per month during the 25-year repayment period
For this situation, the Minister of Community Affairs Paul Scully responded:
There are more mortgage products now than 10 years ago. Although it has decreased, there are still some options. If we go back to 2 and a half years ago, when the COVID-19 pandemic began, many companies had a hard time in the first few weeks...
Rabia did not buy into this response, believing that the previous market chaos was caused by the epidemic, but it is different now.
Labor Party leader Sir Keir Starmer also supported Rabia on social media, believing that the current economic chaos has hit groups like Rabia who are working hard to get loans to buy houses. This crisis was caused by Downing Street , but it made the people pay.
This makes the already difficult first-time home buyers worse...
A new survey released by the Home Owners' Alliance shows that
First-time home buyers in the UK have more difficulty climbing the home purchase ladder than ever before.
data from the annual study pointed out that
87% of British adults and 91% of first-time home buyers said that the ability to buy a house is a serious problem. This is the highest level since the tracking began 6 years ago. Meanwhile, 85% say they want to save money, and 82% say high housing prices are the most difficult problem to overcome.
In the UK, nearly 6 out of every 10 renters who want to own their own house think it’s just a daydream.
In this regard, Paula Higgins, CEO of the Homeowners Alliance, said:
We desire a stable and functional housing market to provide services to everyone. First-time home buyers have difficulty climbing the home purchase ladder and can only continue to rent a house. As some small landlords withdraw from the market, the number of rental housing in the market is limited and the supply exceeds demand, which drives rents to rise steadily. With the surge in rent and food and clothing expenses, it is also difficult for first-time home buyers to save enough down payments. Coupled with the increase in loan interest, it is almost impossible to buy a house.
Mojo Mortgage's latest research says:
First-time home buyers in the UK now need a down payment of 15,000 pounds more than before to buy their first home.
In January 2021, first-home buyers only needed an average of £18,000 to buy their first property, but now they need a down payment of £33,000.
Among them, first-time home buyers in southwestern England increased the most, with the average down payment doubled, from 20,000 pounds to 45,000 pounds.First-time home buyers in London paid the most down payments, with an average of £61,000, up 74.3% from 2021.
In this regard, Richard Hayes, founder and CEO of Mojo Mortgage, pointed out that
Inflation is affecting everyone because they have to deal with the squeeze of the cost of living. First-time home buyers are more worried about how they can save enough money to buy a house. While buying a house together may be easier to save money, people who want to buy a house by themselves may find it difficult to get the down payment without external support.
The ending tip of the real estate circle:
Compared with other groups with relatively rich assets, first-time home buyers are the most difficult group under the two mountains of rising interest rates and rising prices under inflation.
On the one hand, Central Bank has been raising interest rates continuously, and interest rates continue to rise. The interest rates of loan products they can obtain soared, and interest rates will continue to rise next year. This has increased the amount of monthly loan repayments, which has made it even worse for first-time home buyers and cannot afford the loan.
On the other hand, under the highest inflation rate in 40 years, both food, clothing, housing and transportation are rising. Among them, the increase in rent should not be underestimated, and it accounts for a large part of the expenditure. As a result, it is even more difficult to collect the down payment, and the current down payment has increased a lot compared to more than a year ago. It is really difficult to buy a house.
had no choice but to continue renting a house. The rental houses in the market were originally in short supply due to the withdrawal of some small landlords. Now, this can only drive the increase in rent, forming a vicious cycle, making it more difficult to save money to buy a house... and the landlords will naturally not suffer losses, and the increased interest rate costs are all passed on to the tenants.
