The average rate on a two-year mortgage deal across the range of loan-to-value ratios rose on Friday to 5.82%, compared with 5.30% a month ago, financial data provider Moneyfacts said.last month sparked a big jump in market interest rates as investors scrambled to price in more increases in borrowing costs from the Bank of England in coming months.
Interest rates offered by mortgage lenders have soared in response. Late on Thursday, HSBC temporarily withdrew mortgage products for customers applying via brokers. "To help ensure that new customers get the best possible service, we occasionally need to limit the amount of new business we can take each day via broker services," an HSBC spokesperson said.Rival lender Nationwide Building Society also raised its mortgage rates on Friday, having already revised them up twice since last month's Bank of EnglandOn Friday, consultancy Oxford Economics predicted a 10% peak-to-trough drop in house prices, based on the BoE raising interest rates to 5%.
"This repricing of mortgage products coincides with the peak period for existing fixed rate deals ending," said Andrew Goodwin, chief economist at Oxford Economics. "This will maintain the squeeze on household finances, offsetting the boost from lower energy prices. It also suggests we're likely to see an increase in financial stress and, potentially, a rise in the number of forced sales."British house prices in March were 3% down on their all-time peak of November 2022, at which point they were 27% higher than before the COVID-19 pandemic, according to official data.