Britain’s mortgage prices continued to rise on Monday as Kwasi Kwarteng, Chancellor of Exchequer, prepares to address restless Tory politicians to win back trust in his economy handling.
- The average five-year fixed-rate mortgage has shot up to 6.19%
- Following a controversial budget, the Chancellor reached out and met with MPs
According to Moneyfacts Group Plc, the average fixed-rate mortgage for a home on a five-year basis rose to 6.19%. This is the highest level since November 2009, and up from 5.48% one week ago. After surpassing the 6% threshold last week, the average fixed-rate two-year deal rose to 6.31%. This is the highest level since November 2009.
Bloomberg News reports that Kwarteng will meet backbench MPs at Wednesday’s meeting of the Conservative Party’s influential 1922 Committee. On Tuesday, lawmakers will return to Parliament for the first time since Kwarteng’s controversial fiscal statement of Sept. 23. This triggered a market rout that led to a violent Tory conference.
As they adjust to rising costs, banks have taken more than 40% off the market for mortgage products. Last week, the chancellor met with bosses of UK banks to discuss issues arising from his mini-budget.
The executives from major mortgage companies, including Lloyds Banking Group Plc, and NatWest Group Plc discussed the stress faced by customers with buy-to-let and interest-only loans and suggested ways to alleviate it.
According to Resolution Foundation, rising mortgage costs won’t affect as many voters in the future. This is a positive for the government. Due to falling home ownership among the younger, only 28% of UK households now have a mortgage. This is compared to 43% in the nineties.
Only one-third of Tory voters have a mortgage. The Resolution Foundation published Oct. 7 due to a larger and more wealthy pool of supporters who own their homes outright. The think tank said that the politics and economics behind rising interest rates will play a key role in the coming years.
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