Arabic version: ارتفاع معدلات الرهن العقاري في المملكة المتحدة مع تصاعد الاضطرابات في السوق

Turbulence in the UK mortgage market is at its most intense since the mini-Budget of 2022, with the average rate on two-year fixed deals rising above 5%. The rate is at its highest level since August, according to financial information service Moneyfacts. Five-year mortgages are at their most expensive since June, creating a challenging environment for borrowers.

The recent upheaval has led to more mortgage products being pulled from the market in the last two days than at any time since the aftermath of the mini-Budget, when Liz Truss was prime minister. This development is particularly impactful for individuals renewing fixed mortgages or first-time buyers seeking new deals.

Before the US-Israel war with Iran began, financial markets had been expecting a cut in UK interest rates at some point this year. However, these expectations vanished after rising oil prices raised the prospect of higher inflation. The yield, or interest rate, on two-year government bonds, which indicates how much it would cost to borrow money for two years, has been volatile.

Adam French, head of consumer finance at Moneyfacts, commented on the current situation, stating, “Recent days have been some of the most turbulent in the UK mortgage market since the aftermath of the September 2022 mini-Budget. It’s unwelcome news for borrowers, as the prospect of falling mortgage rates has quickly given way to rate rises.” He added that how far they could go is now heavily dependent on how global markets and inflation expectations evolve as conflict in the Middle East unfolds.

According to BBC News, the current turbulence in mortgage rates reflects broader economic uncertainties linked to international events.