The Newshound

Homebuyers need an extra £18,200 deposit as soaring mortgage rates wipe out nine per cent of buying power

Five-year fixed rates, which began the year below 4%, have climbed to around 4.8%, forcing London buyers to find an extra £35,500 in deposit to keep monthly repayments unchanged.
Five-year fixed rates, which began the year below 4%, have climbed to around 4.8%, forcing London buyers to find an extra £35,500 in deposit to keep monthly repayments unchanged.

Mortgage rates have risen from under 4% in January to roughly 4.8% now, driven upward by Middle East tensions pushing energy costs and inflation higher, leaving buyers facing a growing affordability gap. A borrower who could secure a £200,000 mortgage at the start of the year can access only £182,000 for the same monthly outlay. Zoopla's Richard Donnell cautioned that motivated sellers will need to price realistically this autumn, with UK sales already running six per cent below last year's levels. House price growth eased to 0.9% in July, down sharply from 1.3%, as affordability pressures weigh across every region.

London buyers are hardest hit, requiring an additional £35,500 to replicate the same mortgage payments they could have made in January.

The Bank of England has kept interest rates at 3.75% throughout the year despite expectations of cuts, even as fixed mortgage rates continue to rise.

Buyer searches climbed 7% in the four weeks to August 16, pointing to resilient demand even as purchasing power continues to erode.

Moreaol.co.ukHomebuyers now need extra £18,200 for a deposit to counter higher mortgage ratesLBCHomebuyers will need to find an extra £18,200 as buying power plummetsEvening StandardLondoners see buying power crash as mortgage rates remain high
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