Now that the base rate rise has had time to settle in, it’s pretty clear that not much has actually changed as a direct consequence.
The fact that for many lenders this rise was already priced into new products earlier than the announcement, and the fact that according to UK Finance most borrowers will not feel any adverse effects of this due to the fact that some 95% of new loans taken out in May were on a fixed rate basis.
They also say that more than half of all outstanding mortgages are now on a fixed rate deal.
The biggest scandal, however, is that only 1 out of 100 banks have passed on the full rate rise to savers. According to Moneyfacts, whilst 28% of lenders have put up their rates for variable mortgages, only 10% of savings account providers have said they’ll increase their rates.
What has been interesting is the number of brokers talking about down valuations at the moment, which is always a contentious subject with everyone. Valuers hate the term itself for obvious reasons and they argue that clients have to remember they are acting for the lender, not the buyer. They, therefore, look at the value if the lender has to sell the property relatively quickly so can tend to be on the cautious side.
Although house prices do seem to be holding up and still growing, it is frustrating that some valuers seem to be more cautious than others. We would always recommend that agents have comparable evidence of similar things sold in the area ready for a valuer when they come to see a property as this could really help them.
Rate wise however, things are still looking good and lenders are improving their criteria every week.
At the moment, borrowers can still get 2-year fixes are available at 1.39%, (4.839% APRC) and 5-year fixes from 1.83%, (3.88% APRC). Variable discounted rates are around from 0.99%, (4.37% APRC).
Those looking at a Buy-To-Let can still obtain products from just 1.39%, (4.57% APRC) for a 2-year fix.