‘It’s been tough’: UK mortgage brokers chase deals as interest rates soar

theguardian.com:

Chris Sykes admits he has spent one too many late nights glued to the screens in his lounge-turned-home office in east London.

Efforts to secure favourable mortgages have resulted in considerable overtime for mortgage brokers like Sykes, who has been chasing a dwindling number of low-rate deals for clients this year.

Lenders have been cutting low-rate deals in response to nine months of consecutive interest rate rises by the Bank of England, where policymakers have been trying to getsurging inflation – a ripple effect of the war in Ukraine – under control.

This is putting further pressure on brokers who say they are increasingly getting mere hours’ notice before lenders raise their own mortgage rates. “It’s been incredibly tough,” Sykes said. “I’ve generally been just head down, on the computer, and cracking on through applications.”

It also means managing client expectations. Most of the 1.2% offers that would have been considered a good deal last year have disappeared, Sykes, who works for the broker Private Finance, said. Instead, some clients are lucky to get their hands on mortgages with a 3% rate, more than double last year’s favourable rate.

“Personally, I haven’t seen rates rise this rapidly before,” Sykes said.

Bank of England data released earlier this month showed UK mortgage rates rose by 46 basis points to 1.95% between November and May, marking the fastest half-year rise since 2012.

Meanwhile, the average two-year fixed rate mortgage worth 75% of the cost of a home jumped from 1.2% to 2.63% over the eight months to May, in the fastest increase over that time period since records began in 1995.

And with inflation now at 9.4% – far above the UK’s 2% target – markets are pricing in another rate rise in August that