After yesterday’s Autumn Budget, Virgin Money became the first bank to announce a wave of increases to their rates, specifically their mortgage products linked to the stamp duty changes and market reactions.
At 8pm last night the bank made increases of up to 15% across some of its products.
However, this doesn’t seem to be a common reaction as Santander made some reductions on their mortgage products also affected by the Budget.
The high street bank sliced its rates by up to 0.36%, but when it comes to what homeowners and buyers can expect their rates to look like in the near future, experts warn the dust is yet to settle.
Kelsey Phillips, Head of Specialist Lending at Arose Finance warned Newspage: “This divergence suggests we will not see a normalised rate environment until after the market has clarity on the US election and the Monetary Policy Committee decision during the next 2 weeks.”
Other experts have also slammed the “short-sightedness” of the government for placing the strain of their “black hole” obligations onto landlords and homeowners.
However, Ranald Mitchell, Director at Charwin Mortgages, encouraged new borrowers to try “lock in favourable rates” now.
While Jonathan Bone, Head of Mortgages at Better.co.uk, noted that the stamp duty adjustments could make the market more inclined to first time buyes.
He explained: “The Chancellor is committed to supporting first-time buyers and only announced increasing the amount of tax paid when buying a second home.
“The rise in taxes for second homes and investment properties might reduce competition from investors, which could help ease property prices. This, in turn, should make it slightly easier for first-time buyers to find a more affordable home.”
On the other side of the property ladder, Jon Cooper, director of mortgages at Aldermore, warned this very same adjustment easing the burden of first time buyers could put renters under strain.
He explained: “By placing increased pressures on landlords, there will also be increasing costs for renters, not least because we anticipate many landlords might withdraw from the market in response.
“To help repair the housing market in the UK we need to build more homes so that there is less pressure on supply; while there were steps taken in the Budget to support smaller homebuilders, until we take real action to reform planning then it will remain a challenging environment for young people looking to get on the ladder.”
