Is my pension safe and will mortgage rates come down? What to do in the current crisis
What does the economic uncertainty mean for house prices? House prices are likely to fall next year but it is not yet clear by how much. Credit Suisse warned there could be a drop of between 10% and 15% next year, while Graham Cox of Self Employed Mortgage Hub predicts a 20% decline over two to three years.
Are rents going to increase as well?Rents have already started to increase and are expected to climb higher in the coming months, as a result of a shortage of housing in cities, such as London and Manchester, rather than – as yet – a direct impact of rising mortgage rates. However, if would-be buyers continue renting because they can’t get on to the housing ladder, this extra demand could put further pressure on private rental prices.
Landlords may also be forced to move out of London and the south-east, where mortgage rates are higher than yields, to invest in properties further north, which could drive up rental price growth in the capital, David Fell, senior analyst at Hamptons, says.
Should I wait to buy? Buyers who have secured a cheap mortgage are likely to press ahead with the move, even though there is a risk that house prices will fall in 2023. Those who haven’t secured a mortgage could pause for a while, says Richard Donnell, executive director of research and insight at Zoopla. “If we see the political environment become calmer, mortgage rates could fall back quite quickly, but not to the levels we saw last year – 2% mortgage rates are going to be a thing of the past,” he says.
What is likely to happen to mortgage rates? Hopes that calmer market conditions will prompt lower lower rates have not materialised so far and the Bank of England’s chief economist has said he sees the need for a “significant” rate rise
Read more on theguardian.com
