Warning over house sales this summer as mortgage rates rise again

A warning has been issued over property sales falling through this summer after mortgage rates are rising again. The average two-year fixed-rate mortgage was edging just below the 6 percent mark on Friday (June 16) as lenders continued to hike their rates, according to a financial information website.

Across all deposit options, the typical two-year fixed-rate deal jumped up from 5.92 percent on Thursday (June 15) to 5.98 percent today, said Moneyfactscompare.co.uk.

It comes after mortgage rates skyrocketed following the market turmoil after the mini-Budget in September 2022. Average two and five-year fixed mortgage rates topped 6% last autumn before later settling down.

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The pressure on mortgage holders is expected to tighten even further next week, as experts predict the Bank of England will raise interest rates for the 13th consecutive time.

Some are expecting UK interest rates to rise by another 0.25 percentage points next week, taking the rate to 4.75 percent, and say there could be more hikes on the horizon.

Amid mortgage rates rising again, a property expert has now warned that homeowners, especially first-time buyers, may start to pull out of deals this summer.

“Rising mortgage rates will hit the buying power of new buyers who don’t have a mortgage arranged," Richard Donnell, director of research and insight at Zoopla said.

"Those that have got offers locked in at closer to 4 percent will most likely push ahead with purchases where they feel secure in their work and/or need to move for job or family reasons.

“Those who were going to move but for less needs-based reasons may look to pull out of deals and wait over the summer.

Richard