As the budget draws near, experts have said that cheap mortgage rates are unlikely to make a return. The BBC reported that low mortgage levels seen over the last decade are not expected to be seen again in the UK any time soon.
In recent years, Brits have been struggling to get onto the housing ladder and those who are homeowners have experienced increased rates.
Charlie Nunn, chief executive of Lloyds bank, told the BBC that it expected mortgage rates to come down, but not to the near-zero rates they were during the 2010s.
Asked on the BBC’s Sunday with Laura Kuenssberg programme if “cheap” mortgage deals were ever going to come back, Mr Nunn said: “We do think they [mortgage rates] are going to continue to come down, but getting back to the level we saw in the last decade where interest rates were down at zero I think is unlikely.”
Ahead of the budget, many are looking towards what changes will be made and how this will impact buying a property in the UK.
Following the Covid pandemic and Russia’s invasion of Ukraine, the rate charged on new fixed mortgage deals has risen in recent years.
Last week, mortgage rates were dropping daily, but it didn’t last. On Friday, the average two-year fixed mortgage rate was 5.36%, according to financial information company Moneyfacts. A five-year deal was 5.05%.
For first time home-buyers, the chances of getting a mortgage are becoming increasingly difficult with many feeling a sense of helplessness.
In his BBC interview, Mr Nunn added that increases to borrowing costs had been “really challenging” for homeowners, but pointed out only about 40% of UK properties have a mortgage.
He added that the average income of a family with a mortgage was £75,000, and so “many of those families have been able to absorb” higher repayments.
This comes after television presenter Kirstie Allsopp recently took to X to share her thoughts on the process of buying a home in the UK. She wrote: “Our home purchase system is f*****.
The Tories couldn’t be bothered to reform it, and our new Government only seem interested in tenants. When people ask why our productivity is so low I know that our inability to move house is a big part of it. Who is going to sort it out?”
Many commenters shared their thoughts on changes which need to be made to improve the process of buying a house in the UK.
