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A consistent period of interest rate rises


Welcome to another week of wonder in our fine industry.

As mentioned last week, and continuing this week, it has been a consistent period of rises in the past 6 months since the low point of just 0.1% in December last year. Of course, this is not just a UK but a worldwide inflationary issue, which saw the FED in the US increase their rates by a whopping 0.75% recently.

The Bank of England looks like it prefers regular smaller rises than a couple of biggies and perhaps it is too early to say which method is best, but it does feel like death by a thousand cuts, and more rises look likely.

Lenders, however, seem to be following the US approach, and over the past week there have been some big increases; Barclays as much as 0.76% to its 10-year fixed rates and 0.6% elsewhere. Rises of over 0.5% were mirrored by Accord, TSB, Scottish Widows, and Halifax with others not far behind.

Borrowers these days really cannot afford to procrastinate for a second, nor can brokers, for that matter!

One interesting stat, according to Halifax, was that during the first quarter of 2022, the average price of a home in the UK was £279,431, while the average salary was £39,402. This put the house price to income ratio at 7:1, which is the highest, or least affordable, recorded.

Meanwhile, the Government are not doing very well on their housebuilding targets, with the number of new homes completed in the first quarter of 2022 compared to the last quarter of 2021 falling by more than 10%.

To try to help encourage more building, Homes England has launched a Help to Build Equity Loan scheme, which aims to help people self-build or custom-build their own homes with a 5% deposit. Under the new government scheme, self and custom builders will have three years to build their homes.

A couple of lender items of note, and a very positive move, is that Halifax are now going to be able to lend up to 95% LTV on new build houses (not flats), which is up from the maximum of 90%. This helps First Time Buyers struggling with a deposit, especially with the Help to Buy Scheme due to end in October for new applications. It also helps borrowers to attain greener housing stock.

Following the Green Agenda and the changes to BTL properties, The Mortgage Works have now stated that a valuation will not be instructed until they are in receipt of a valid EPC. Meanwhile, Pepper Money are offering all landlords who borrow in their personal name a free Energy Efficiency survey, EPC certificate, and tailored action plan.

It’s all go and with Santander just announcing they are pulling rates again, I now have to rush off!

Have a great week! 😊

Best Mortgage Rates

In terms of mortgage rates, for standard residential mortgages, borrowers can obtain 2-year fixes at 2.83% (4.60% APRC) and 5-year fixes from 2.78%, (4.20% APRC), whilst variable discounted rates are around from 1.44%, (5.20% APRC).

Those looking at Buy-To-Let can now obtain products from 1.89%, (4.60% APRC) for a 2-year tracker or 5-year fixes are available from 2.71% (4.00% APRC).


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Andrew Montlake

Written by Andrew Montlake

Andrew Montlake, better known as Monty, began his journey with an Hons degree in Economics & Politics before starting in the mortgage industry in February 1994. As a main founder of Coreco in 2009, he successfully grew the brand, marketing, and communications, and was made MD in 2019 focussing on the overall vision, strategy, and culture of the company. As Coreco’s media spokesperson, Andrew can often be seen or heard on TV and radio as well as regularly commenting in the national, local, and trade press. He is the author of this acclaimed Mortgage Blog and is well-known for his social media, podcasts, and public speaking. Andrew is now proud to serve as Chairman of the Association of Mortgage Intermediaries, (AMI) as a cheerleader for the Mortgage Industry as a whole and continues to work at the coal face, writing mortgage business and advising clients.

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