Buying a house right now means entering a hellscape

·2-min read
Houses in London (PA Archive)
Houses in London (PA Archive)

Buying a home is a cruel mix of ceaseless admin, crushing disappointment and existential panic. It’s my first time and, lucky me, I’m trying desperately to latch onto the lowest rung of the property ladder at what seems like a historically terrible time. I find myself in the worst of both worlds, with record house prices (London’s hit a high of £525,893 this summer) and the threat of rising mortgage rates.

I’ve spent the last few days in a fog of paperwork, hunched over my laptop until 11pm on a sacred Friday night uploading approximately two million documents in 25 different formats into three separate digital portals: payslips, marriage certificate, financial goals (pah!), shoe size, name of first pet, celebrity guilty crush… on and on it went. All in an attempt to get a mortgage locked in before the looming interest hike.

Yesterday’s shock Bank of England announcement that interest rates are to remain unchanged has provided little relief. For now, rates will stay at a record low (0.1 per cent). But the thinking goes that rates will increase (0.25 per cent) next month and probably up further (0.5 per cent) shortly after that. So the can has been kicked down the road.

It makes scant difference for those who are buying now. Many lenders have already removed their cheaper products off the market as I found to my dismay this week. Sub-one per cent fixed rate mortgages have all but disappeared and for first-time buyers, the costs are even higher — the average rate for a two-year fixed first-time buyer mortgage at 95 per cent has jumped from 2.45 per cent to 2.69 per cent. It may not sound like much but with rising food and energy prices, plus increasing council tax, the spiralling cost of living means the future is not peachy for Generation Screwed.

Of course, this isn’t a house-buying hellscape cooked up just for me; the Office for Budget Responsibility warns that by 2023, interest rates could be at 3.5 per cent. These increases will come just as many who managed to lock in cheap two-year fixed deals will be looking to remortgage. A rate increase that steep would affect landlords, meaning renters too will face higher payments. Generation Screwed? Make that population screwed.

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