Prices rising and rates creeping up
Simultaneously, average first-time buyer mortgage rates climbed for the fourth consecutive month in July, up from 3.99% in March to 4.19% in July. In the last three months they have climbed 0.14 percentage points.
As a consequence, first-time buyer mortgage repayments are rising as a proportion of income. Over the last three months they have climbed from 21.0% of a first-time buyer’s income to 22.6%. A year ago, they represented just 20.2% of a first-time buyer’s annual income.
David Brown, commercial director at parent company LSL Property Services, said: “The urgency among first-timers to lock into cheap fixes is propelling activity at the bottom of the market. Fixed deals have already started getting more expensive, as banks raise rates in anticipation of a potential interest rate rise. Governor Carney’s to-ing and fro-ing over the date of the base rate rises have added confusion into the economic equation – encouraging more buyers to act now, while the last of the cheap deals remain.”