Your July market update

July in Britain means sunburn, complaining about the heat, complaining about the rain, complaining about school holidays being too long, complaining about school holidays being too short, you know the vibe. And while your “out of office” might be on, the news cycle is certainly still in session. Let’s break down what’s happening in the property world, asking questions like: What do mortgage rates look like? Why isn't inflation significantly coming down given rising interest rates? What’s going on in the world of renting? Let’s get started. 

I’m worried about my mortgage costs, are there any ways to keep my mortgage rate down?

Firstly, if you’re worried about coming to the end of a fixed-rate deal and the potential for increased mortgage costs, don’t suffer in silence. You are definitely not alone. Get in touch with any questions or concerns, and our expert team of advisers can guide you through it. 

Wondering how you could keep costs down? A hearing by the Treasury Select Committee revealed that many are choosing to extend the term of their mortgage (the length of time the loan is taken out for, extending it could bring down costs), while others are choosing to overpay on their current deal in order to prevent their repayments surging upwards when it comes to renegotiating a mortgage deal. The government is putting pressure on lenders to be compassionate and find solutions for borrowers — and some new measures are being put in place — but it’s an ongoing story, so we’ll keep you posted. 

I’m a first-time buyer. Do soaring mortgage rates mean I can’t buy?

Only you can decide that.  There are several ways to work out whether you’re in a place to buy, the first step of which could be using our mortgage calculator as a rough indicator of what you can borrow. Although borrowing is becoming more expensive, the countereffect of that means that house prices are coming down. For some prospective homeowners, the drop in house prices has meant that they are able to sustain their buying hopes, even with a higher mortgage rate. It's all about your position, so don't be afraid to reach out to an expert to help find out what's best for you.

I’m a renter, what does it mean?

Renters are an important part of the housing market — and are way too often left out of the discussion. But renters are being affected by changing rates too, as landlords pass on the costs. While the chancellor Jeremy Hunt has uprated (increased) many forms of social security in line with inflation, housing benefits for private renters (known as the Local Housing Allowance or LHA) remain at the level set in 2020. This freeze means the gap between LHA provisions and rent, which has risen by almost 10%, has grown wider.

We know, that sounds like a mouthful — but essentially it means that private renters are being hit hard and, for those getting help through housing benefits, that help is meaning less and less.

This gap has led to many putting pressure on the chancellor to readdress the LHA freeze, to ensure that renters are protected, though the government has confirmed that the freeze will continue for the rest of 2023 and 2024. So unless that changes, that gap could just keep widening.