UK house buyers ‘left powerless’ as mortgage deals hang in balance
Homeowners and potential buyers have been left feeling “totally powerless” this weekend as thousands wait to find out whether their mortgage deals will now cost them hundreds of pounds extra a month while brokers report people already pulling out of the market or preparing to downsize.
The chancellor Kwasi Kwarteng’s mini-budget on 23 September has resulted in 40% of mortgage products being withdrawn in the past week, with many potential buyers still waiting to hear what they will pay and others being offered higher rates or reduced loan sizes.
“People were worried about the energy crisis and how they were going to heat their homes, but this is a different type of fear,” said Michael McLaughlin, a mortgage broker in Northern Ireland. “Now it’s ‘Are we going to have roofs over our heads?’ They just feel totally powerless.”
People are responding to the situation in different ways, he said, with some planning to sell their homes and downsize or move in with family members as they cannot afford the hikes in repayments.
Some of McLaughlin’s clients have paid a penalty fee in the past few days to exit their current fixed-rate mortgage deal in order to secure a higher rate now, fearing it may go higher still. “It’s because they’re not willing to wait to get an even higher rate next year,” he said. “They’re paying a penalty to break their contract to do that.”
Meanwhile, one property company in his local area has paused its planned development, estate agents are reporting fewer bookings for viewings, and customers are waiting for up to an hour or more to speak to their lenders on the phone.
“It’s like an icy fear, the speed at which this has happened compared with [the housing market crash in] 2008. The collapse has been seismic and
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