Purchasing a home can be one of the most exciting things to do. It can also be the largest purchase you can ever make. It is not an easy thing to purchase a home because of its expensive nature. Due to that, purchasing a home also requires you to make huge financial decisions otherwise it can mess you up as far as finances are concerned.
There are several mortgages out here but choosing the right one to deal with will help you save a lot. However, the mortgage market continues to collapse in the UK as more mortgage brokers complain of receiving more financial advice from homeowners than before. Those who had developed an interest in mortgages are now wondering whether to go ahead or opt for renting as the best option.
Is The UK Heading For A Housing Crush?
Increasing mortgage rates is one of the threatening things in the mortgage market and even scares away investors from the market. This could possibly lead to a price crash in the market. The increase in mortgage rates continues to make homeowners go through difficult times. Some have even opted to sell their properties to look for a more favourable option.
Some UK analysts predict that the bank will raise their interest to 6% and that will push the mortgage rates to a level that has not been witnessed in the mortgage industry in the UK for many years now. The announcement of the increase in mortgage rates has already caused a lot of chaos in the market. Several lenders are now suspending their deals for fear of making huge losses in the near future and that is a big threat to the market.
Will House Prices Fall?
House prices in the UK have been rising consistently and continuously for many years now. There are now growing concerns that the UK is headed straight towards another housing market crash, which will obviously cause a fall in house prices. The rising rates that saw some mortgage lenders withdraw their deals due to the volatile market will cause higher repayments for those already with mortgages, and the expectation is that we will begin to see defaults on mortgages soon, as with the rising interest rates, homeowners will no longer be able to pay their mortgages.
The last time the UK entered a long recession was in 2008 when housing prices were crushed. House prices had been increasing since Covid-19 until the joint pressures of Brexit and the Ukraine war were compounded by what’s widely regarded as being the most calamitous budget in the UK’s history.
Renting vs Buying
If you’ve just had a mortgage offer withdrawn, or you were poised to buy your first house, this sudden market crash will have a long-term effect on you. Suddenly instead of buying, you’re ‘stuck’ renting, and with rental costs at an all-time high, the impact on your ability to save will be huge.
It would appear obvious now, that the UK is going to face a dual housing market crisis: the collapse of mortgage offers and rising monthly mortgage price rises leading to an inevitable default and repossession crisis, leading to an increase in renters and a rise in already high monthly rental costs as landlords take advantage of increased demand……it’s a perfect storm, and the UK is poised right in the eye of it.
Written by Stephen Taylor, Propaganda CEO