Appetite for home loans in the United Kingdom has dropped sharply, recording a 32-month low during August as prospective buyers retreat from the market due to escalating borrowing expenses.
The conflict in Iran has contributed to a significant increase in financing costs, with the average interest rate for a five-year fixed mortgage climbing to 5.94%, according to data from Moneyfacts. This represents the highest level for such loans since October 2023.
The Bank of England confirmed on Tuesday that only 54,918 mortgages were approved for new home purchases in August. This figure marks the lowest monthly total recorded since December 2023, signaling a substantial cooling in housing market activity.
Iran war fears? Sounds like the market just needs calm. Hopefully, central banks can stabilize rates before winter hits.
Five percent is brutal. I’ve watched my budget evaporate trying to buy a flat. So glad we are renting for now.