Increasing interest rates and house prices result in increased rejections
Many people in the UK that were thinking of buying a property or even remortgaging have found themselves in a difficult situation, as interest rates and house prices continue to rise. Interest rates in the UK have taken a real hit over the past eight months, with the Bank of England applying three interest rate rises of 0.25% each between last August and this January, and further rises expected in May and in the summer, which could send interest rates soaring further.
In addition to this house prices in the UK have continued to soar, with many properties rising by an average of fifteen percent of £30,000 within the space of a year according to figures. In March of this year there was a rise of £8000 on the average property according to Right Move, and these soaring prices couples with rising interest rates means that those looking to purchase a property face a very bleak outlook.
And is seems that finding an affordable property and being able to manage repayments with rising interest rates isn't the only issue. Data indicated that the number of rejections on mortgage applications has also been rising, with nearly half a million mortgage application rejections since October last year according to the results of a YouGov survey carried out recently.
On top of this, the rising interest rates have resulted in many lenders pushing up the rates on their fixed rate mortgages or taking these mortgages off the market altogether making it difficult for those purchasing a property or remortgaging to lock themselves into an affordable interest rate before the Bank of England hikes the rates up yet again. One official from MoneyExpert stated: "Affordability is the major issue in the mortgage market as recent reports of a drop in the number of first-time buyers demonstrates."
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