Mortgage payments on the rise
The bi-annual report issued by the Bank of England, has warned homeowners that mortgage payments could rise by as much as £230 a month. Many borrowers whose fixed-rate mortgages expire this year are having to pay rates around 2.5% higher - the equivalent of £2,748 a year on an average £150,000 mortgage.
This means that many young homeowners with minimal deposits will inevitably be forced to resort to standard variable rates as lenders raise the cost of credit.
”UK banks have markedly tightened secured and unsecured credit availability to UK households and intend tightening it further over the next few months,” was the statement issued by the Bank of England.
For first time buyers and families with a low income that are planning to buy a house, the best option would be a small house in a decent area. Many buyers could find bargains in areas such as Raynes Park and Ealing.