First-time buyers ‘suffer most’ from rising mortgage rates due to war
The cost of home loans for buyers trying to climb onto the housing ladder has jumped since war in the Middle East began last month.
First-time buyers are most affected by the jump in mortgage rates since war in the Middle East began last month, Hamptons says.
The number of FTBs forced to take out home loans with rates above 5% has shot up from 8% to 21%, latest figures from the agency reveal.
Other buyers are also seeing the effects of the conflict with the proportion able to secure rates below 5% dropping from 98% to 91%.
And only 8% are now being offered rates below 4%, down from 37% at the beginning of March, The Times reports.
Mortgages pulled
Lenders have pulled nearly 1,500 mortgage deals so far this month, according to Moneyfacts.
The data firm also said that the average two-year fixed rate is 5.43%, compared with 4.83%. And the average five-year deal is 5.45% up from 4.95%.
First-time buyers are particularly exposed to what is happening in the Middle East.”
David Fell, Lead Analyst at Hamptons, says: “First-time buyers are particularly exposed to what is happening in the Middle East.
“They not only face higher rates because they generally have lower loan-to-value ratios, but it is also the first time they have bought a home and they are borrowing a higher proportion of their income.”
And David Hollingworth, Associate Director at L&C, says: “On Monday morning, there were expectations that there would be four rate rises this year, and now Trump’s comments have calmed things down a little bit.
“You’ve got to expect at the moment that this kind of volatility that we’ve been seeing in the last three weeks, you’ve got to assume it is set to continue because it’s only gathered pace.”
