Home Real Estate Rising mortgage costs to push down house prices, Halifax warns – business live | Business

Rising mortgage costs to push down house prices, Halifax warns – business live | Business

by Ozva Admin
Fears of rising interest rates are cooling the markets, reports North London estate agent Jeremy Leaf:

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‘New buyers are pausing for breath while they consider the likely pace and size of future interest rate hikes, so activity is reducing. The question is whether worries about rising mortgage payments outweigh the benefits of the recent stamp duty reduction, particularly for first-time buyers.

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‘The mini Budget sparked a chain reaction of unintended consequences raising buyer concerns that any savings in stamp duty and other taxes would be more than offset by mortgage rates rising much more quickly and higher than expected.’

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Property buying agent Emma Fildes of Brickweaver points out that annual house price inflation is now back in single figures (for the first time since January). Could the long run of growth be approaching a dead end?

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According to @HalifaxBank AVG house prices decreased by -0.1% to £293,835 in September. With annual growth falling, from its long run in double digits, to 9.9% from +11.4% in Aug, could the UK property market road for growth be approaching a dead end? pic.twitter.com/23pQBLZXxa

— Emma Fildes (@emmafildes) October 7, 2022

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Rising mortgage rates are the main blocker for buyers seeking to get on the property ladder and those hoping to move up it, agrees Myron Jobson, senior Personal Finance Analyst at interactive investor:

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“Mortgage affordability is a mushrooming pain point for buyers. Mortgage rates have been on the up in line with increases to the Bank of England’s base rate, but rates have typically spiked by between one and two percentage points two weeks on from the mini-Budget.

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The difference amounts to hundreds in pounds and pence terms, and it means that buyers can’t afford as much house as they could 14 days ago.

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Wales remains at to the top of the table for annual house price inflation with a rate of +14.8%, down from +15.8% in the previous month, Halifax says.

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The average property in Wales now costs £224,490.

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London still has the slowest rate of annual growth amongst the UK nations and regions, with house prices rising by +8.1% over the last year. But properties in the capital are still the most expensive, with the average costing £553,849.

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Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.

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The UK housing market is slowing, and the crisis caused by the government’s mini-budget will make it worse.

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That’s the verdict from Halifax this morning. It reports that the average house prices dipped in September, by 0.1%, leaving the average property now costing £293,835.

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The annual house price inflation rate slowed for the third month in a row, to 9.9% from 11.4%, the lowest rate since January.

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Kim Kinnaird, director at Halifax Mortgages, reports that house prices have been largely flat since June, as the markets entered “a more sustained period of slower growth”.

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Kinnaird warns that house prices will come under heavier downward pressure in the months ahead, from rising borrowing costs and the cost of living crisis:

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While stamp duty cuts, the short supply of homes for sale and a strong labour market all support house prices, the prospect of interest rates continuing to rise sharply amid the cost of living squeeze, plus the impact in recent weeks of higher mortgage borrowing costs on affordability, are likely to exert more significant downward pressure on house prices in the months ahead.

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Kinnaird adds that “this will undoubtedly be a cause of some concern for homeowners”, but points out that recent property price inflation has been unprecented.

“,”elementId”:”84822be5-acc6-4227-8b15-64aeb9adb896″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”

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It’s important to look at slower growth in this context – since the start of the pandemic average property values have risen by around +23% (almost £55,000) with detached house prices up by more than £100,000 over the same period.”

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“,”elementId”:”89ecb801-e5b4-4bb0-b454-2af222caceef”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Interest rate expectations soared during the market panic following the mini-budget, with the Bank of England expected to raise rates towards 6% by next summer.

“,”elementId”:”070e3103-726e-439f-a1c9-1bd79130635d”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

The average rate on two and five-year fixed mortgages rose over 6% this week, and is expected to keep rising. That is pricing some people out of the market, and leaving others facing a jump in repayments when they remortage.

“,”elementId”:”845c534a-f1c9-48da-b063-a2c2b037fbfd”},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

⚠️ British house prices fell for the second time in three months in September in month-on-month terms and rising borrowing costs are likely to exert more downward pressure soon, mortgage lender Halifax said on Friday.

– Reuters via https://t.co/ymHY6x4lOb https://t.co/nyhjA4w7WL pic.twitter.com/QRLxnXja9l

— PiQ  (@PriapusIQ) October 7, 2022

\n”,”url”:”https://twitter.com/PriapusIQ/status/1578266817541607424″,”id”:”1578266817541607424″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”48a951a8-8a9c-4626-b925-c1b487bb1a31″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Yesterday, UK bank bosses raised concerns over the state of the UK’s mortgage market at a high-level meeting at No 11 Downing Street.

“,”elementId”:”b024f614-aa2c-4f2e-a6e1-134ad3ae45e7″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Kwasi Kwarteng is now considering extending the government’s mortgage guarantee scheme to help the market. That scheme lets banks and building societies buy a guarantee from the government on the slice of the mortgage between 80% and 95% of the property’s value, to protect them if a property is repossessed.

“,”elementId”:”06492600-f935-4519-b3d3-f1718353107f”},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/business/2022/oct/06/uk-banks-to-raise-mortgage-market-fears-in-kwarteng-meeting”,”text”:”Kwarteng considers extending mortgage guarantee scheme”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”71eebb32-bbf9-4f45-8949-1c2710f359b8″},{“_type”:”model.dotcomrendering.pageElements.SubheadingBlockElement”,”html”:”

Also coming up today

“,”elementId”:”a35e637e-ee91-4a00-a2ab-2079d66066e8″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

The main event for the markets today should be September’s Non-Farm Payroll report, which will show how many jobs were created in America last month.

“,”elementId”:”d4ed1173-4b4c-47b6-9d59-3a5c722044e0″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Economists predict that hiring slowed, to around 250,000 from 315,000 in August, as rising interest rates slow economic growth. A weak jobs report could encourage the US Federall Reserve to slow its interest rate rises, which might weaken the dollar.

“,”elementId”:”e46fddcd-7f0c-46f8-98ac-010550dbf870″},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

With the current #US #market narrative being “bad is good”, markets are hoping for fairly weak non farm payroll (#NFP) numbers tonight.
However some commentators feel, #labour market weakness could take a while to happen. pic.twitter.com/0IITF7STPT

— Arjun G Nagarajan (@arjungn80) October 7, 2022

\n”,”url”:”https://twitter.com/arjungn80/status/1578261636431110144″,”id”:”1578261636431110144″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”efba311c-55ac-4d8e-bf2d-1d853496f900″},{“_type”:”model.dotcomrendering.pageElements.SubheadingBlockElement”,”html”:”

The agenda

“,”elementId”:”fe21f12f-211b-4e6b-ac5d-8bd79e981c57″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

    \n

  • 7am BST: Halifax house price index

  • \n

  • 7.45am BST: French trade balance for August

  • \n

  • 9.30am BST: UK labour productivity for Q2

  • \n

  • 1.30pm BST: US Non-Farm payroll report

  • \n

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key events

Fears of rising interest rates are cooling the markets, reports North London estate agent Jeremy Leaf:

“,”elementId”:”90b07c8c-d66a-4689-a271-ce2e6d9e083e”},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”

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‘New buyers are pausing for breath while they consider the likely pace and size of future interest rate hikes, so activity is reducing. The question is whether worries about rising mortgage payments outweigh the benefits of the recent stamp duty reduction, particularly for first-time buyers.

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‘The mini Budget sparked a chain reaction of unintended consequences raising buyer concerns that any savings in stamp duty and other taxes would be more than offset by mortgage rates rising much more quickly and higher than expected.’

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“,”elementId”:”32feccc4-a778-4b3d-ad93-7f8035a261bf”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Property buying agent Emma Fildes of Brickweaver points out that annual house price inflation is now back in single figures (for the first time since January). Could the long run of growth be approaching a dead end?

“,”elementId”:”6c397809-1f5f-466f-b6f8-b4edcf2d8856″},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

According to @HalifaxBank AVG house prices decreased by -0.1% to £293,835 in September. With annual growth falling, from its long run in double digits, to 9.9% from +11.4% in Aug, could the UK property market road for growth be approaching a dead end? pic.twitter.com/23pQBLZXxa

— Emma Fildes (@emmafildes) October 7, 2022

\n”,”url”:”https://twitter.com/emmafildes/status/1578269996777627649″,”id”:”1578269996777627649″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”6e8a8ba3-dd78-462d-b47b-ac310c2a1786″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Rising mortgage rates are the main blocker for buyers seeking to get on the property ladder and those hoping to move up it, agrees Myron Jobson, senior Personal Finance Analyst at interactive investor:

“,”elementId”:”f5cae3cf-2d4a-460e-8488-d5c58c18f1c4″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”

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“Mortgage affordability is a mushrooming pain point for buyers. Mortgage rates have been on the up in line with increases to the Bank of England’s base rate, but rates have typically spiked by between one and two percentage points two weeks on from the mini-Budget.

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The difference amounts to hundreds in pounds and pence terms, and it means that buyers can’t afford as much house as they could 14 days ago.

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“,”elementId”:”05694232-b7aa-48d5-ae0c-17822d5fbfda”}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1665124773000,”blockCreatedOnDisplay”:”02.39 EDT”,”blockLastUpdated”:1665125515000,”blockLastUpdatedDisplay”:”02.51 EDT”,”blockFirstPublished”:1665125515000,”blockFirstPublishedDisplay”:”02.51 EDT”,”blockFirstPublishedDisplayNoTimezone”:”02.51″,”title”:”Interest rate rises are putting off new buyers”,”contributors”:[],”primaryDateLine”:”Fri 7 Oct 2022 02.59 EDT”,”secondaryDateLine”:”First published on Fri 7 Oct 2022 02.28 EDT”},{“id”:”633fc9f98f08e561623cab55″,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Wales remains at to the top of the table for annual house price inflation with a rate of +14.8%, down from +15.8% in the previous month, Halifax says.

“,”elementId”:”a1d606ac-9657-4c6f-b2e0-f041bf149ce4″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

The average property in Wales now costs £224,490.

“,”elementId”:”516ef099-de57-4abb-ae7c-ad5dbba2f68a”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

London still has the slowest rate of annual growth amongst the UK nations and regions, with house prices rising by +8.1% over the last year. But properties in the capital are still the most expensive, with the average costing £553,849.

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Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.

“,”elementId”:”2e3432ef-eccc-46cd-8530-d45e44ebe5cd”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

The UK housing market is slowing, and the crisis caused by the government’s mini-budget will make it worse.

“,”elementId”:”4c96b166-1b00-40c4-9c8d-92395209ecf5″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

That’s the verdict from Halifax this morning. It reports that the average house prices dipped in September, by 0.1%, leaving the average property now costing £293,835.

“,”elementId”:”f646f60b-7c9c-4702-8fa3-f6df0ee85b09″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

The annual house price inflation rate slowed for the third month in a row, to 9.9% from 11.4%, the lowest rate since January.

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Kim Kinnaird, director at Halifax Mortgages, reports that house prices have been largely flat since June, as the markets entered “a more sustained period of slower growth”.

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Kinnaird warns that house prices will come under heavier downward pressure in the months ahead, from rising borrowing costs and the cost of living crisis:

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\n

While stamp duty cuts, the short supply of homes for sale and a strong labour market all support house prices, the prospect of interest rates continuing to rise sharply amid the cost of living squeeze, plus the impact in recent weeks of higher mortgage borrowing costs on affordability, are likely to exert more significant downward pressure on house prices in the months ahead.

\n

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Kinnaird adds that “this will undoubtedly be a cause of some concern for homeowners”, but points out that recent property price inflation has been unprecented.

“,”elementId”:”84822be5-acc6-4227-8b15-64aeb9adb896″},{“_type”:”model.dotcomrendering.pageElements.BlockquoteBlockElement”,”html”:”

\n

It’s important to look at slower growth in this context – since the start of the pandemic average property values have risen by around +23% (almost £55,000) with detached house prices up by more than £100,000 over the same period.”

\n

“,”elementId”:”89ecb801-e5b4-4bb0-b454-2af222caceef”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Interest rate expectations soared during the market panic following the mini-budget, with the Bank of England expected to raise rates towards 6% by next summer.

“,”elementId”:”070e3103-726e-439f-a1c9-1bd79130635d”},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

The average rate on two and five-year fixed mortgages rose over 6% this week, and is expected to keep rising. That is pricing some people out of the market, and leaving others facing a jump in repayments when they remortage.

“,”elementId”:”845c534a-f1c9-48da-b063-a2c2b037fbfd”},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

⚠️ British house prices fell for the second time in three months in September in month-on-month terms and rising borrowing costs are likely to exert more downward pressure soon, mortgage lender Halifax said on Friday.

– Reuters via https://t.co/ymHY6x4lOb https://t.co/nyhjA4w7WL pic.twitter.com/QRLxnXja9l

— PiQ  (@PriapusIQ) October 7, 2022

\n”,”url”:”https://twitter.com/PriapusIQ/status/1578266817541607424″,”id”:”1578266817541607424″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”48a951a8-8a9c-4626-b925-c1b487bb1a31″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Yesterday, UK bank bosses raised concerns over the state of the UK’s mortgage market at a high-level meeting at No 11 Downing Street.

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Kwasi Kwarteng is now considering extending the government’s mortgage guarantee scheme to help the market. That scheme lets banks and building societies buy a guarantee from the government on the slice of the mortgage between 80% and 95% of the property’s value, to protect them if a property is repossessed.

“,”elementId”:”06492600-f935-4519-b3d3-f1718353107f”},{“_type”:”model.dotcomrendering.pageElements.RichLinkBlockElement”,”url”:”https://www.theguardian.com/business/2022/oct/06/uk-banks-to-raise-mortgage-market-fears-in-kwarteng-meeting”,”text”:”Kwarteng considers extending mortgage guarantee scheme”,”prefix”:”Related: “,”role”:”thumbnail”,”elementId”:”71eebb32-bbf9-4f45-8949-1c2710f359b8″},{“_type”:”model.dotcomrendering.pageElements.SubheadingBlockElement”,”html”:”

Also coming up today

“,”elementId”:”a35e637e-ee91-4a00-a2ab-2079d66066e8″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

The main event for the markets today should be September’s Non-Farm Payroll report, which will show how many jobs were created in America last month.

“,”elementId”:”d4ed1173-4b4c-47b6-9d59-3a5c722044e0″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Economists predict that hiring slowed, to around 250,000 from 315,000 in August, as rising interest rates slow economic growth. A weak jobs report could encourage the US Federall Reserve to slow its interest rate rises, which might weaken the dollar.

“,”elementId”:”e46fddcd-7f0c-46f8-98ac-010550dbf870″},{“_type”:”model.dotcomrendering.pageElements.TweetBlockElement”,”html”:”

With the current #US #market narrative being “bad is good”, markets are hoping for fairly weak non farm payroll (#NFP) numbers tonight.
However some commentators feel, #labour market weakness could take a while to happen. pic.twitter.com/0IITF7STPT

— Arjun G Nagarajan (@arjungn80) October 7, 2022

\n”,”url”:”https://twitter.com/arjungn80/status/1578261636431110144″,”id”:”1578261636431110144″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”efba311c-55ac-4d8e-bf2d-1d853496f900″},{“_type”:”model.dotcomrendering.pageElements.SubheadingBlockElement”,”html”:”

The agenda

“,”elementId”:”fe21f12f-211b-4e6b-ac5d-8bd79e981c57″},{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

    \n

  • 7am BST: Halifax house price index

  • \n

  • 7.45am BST: French trade balance for August

  • \n

  • 9.30am BST: UK labour productivity for Q2

  • \n

  • 1.30pm BST: US Non-Farm payroll report

  • \n

“,”elementId”:”cd153f8a-ae60-4b47-98f9-5f44f097de9c”}],”attributes”:{“pinned”:false,”keyEvent”:true,”summary”:false},”blockCreatedOn”:1665124119000,”blockCreatedOnDisplay”:”02.28 EDT”,”blockLastUpdated”:1665125118000,”blockLastUpdatedDisplay”:”02.45 EDT”,”blockFirstPublished”:1665124119000,”blockFirstPublishedDisplay”:”02.28 EDT”,”blockFirstPublishedDisplayNoTimezone”:”02.28″,”title”:”Introduction: UK house prices dropped in September”,”contributors”:[],”primaryDateLine”:”Fri 7 Oct 2022 02.59 EDT”,”secondaryDateLine”:”First published on Fri 7 Oct 2022 02.28 EDT”}],”filterKeyEvents”:false,”id”:”key-events-carousel-mobile”}”>

filters BETA

One would think that falling house prices would help people climb the housing ladder.

But if mortgage rates continue to rise, prospective first-time buyers may find they’re still priced out of the market.

The Bank of England has already raised interest rates six times in a row, from 0.25% at the beginning of the year to 2.25% in September, with a very significant rise in November.

avinav Nigam, co-founder of the real estate investment platform, immo, He says that these rising borrowing costs have already had an effect on the market and are affecting affordability.

The slowdown in house price growth for September was expected as higher interest rates kicked in in May and June, now being fed into transaction data due to the delay in pass-through.

We are seeing property listings drop by 15-20 per cent in some parts of the UK as uncertainty encourages owners to delay transaction decisions.

“The rapid pace of growth we have seen in recent years is coming to an end, in part due to recent interest rate hikes by the Bank of England and the plunge in the pound following the government’s mini-budget.

“House prices are forecast to correct by 7 to 10 percent in the coming months. However, we do not expect a reversal of house price growth to improve housing affordability much due to rapidly rising interest rates. Mortgage lenders are starting to require consumers to show they can afford 7% interest rates, as an indication of where rates might go.

Interest rate hikes scare away new buyers

Fears of rising interest rates are cooling markets, North London estate agent reports Jeremy Leaf:

‘New buyers are taking a breather as they consider the likely pace and size of future interest rate hikes, so activity is winding down. The question is whether concerns about rising mortgage payments outweigh the benefits of the recent stamp duty reduction, particularly for first-time buyers.

“The mini-budget set off a chain reaction of unintended consequences that increased buyers’ concern that any savings in stamp duty and other taxes would be more than offset by rising mortgage rates much faster and higher.” than expected.”

property buying agent Emma fildes of brick weaver notes that annual house price inflation is now back in single figures (for the first time since January). Could long-term growth be approaching a dead end?

According to @HalifaxBank AVG house prices decreased by -0.1% to £293,835 in September. With annual growth falling, from its long run in double digits, to 9.9% from +11.4% in Aug, could the UK property market road for growth be approaching a dead end? pic.twitter.com/23pQBLZXxa

— Emma Fildes (@emmafildes) October 7, 2022

\n”,”url”:”https://twitter.com/emmafildes/status/1578269996777627649″,”id”:”1578269996777627649″,”hasMedia”:false,”role”:”inline”,”isThirdPartyTracking”:false,”source”:”Twitter”,”elementId”:”2303fc0f-7ccc-4deb-a2ad-f9463657e5f2″}}”>

According to @HalifaxBank Median house prices decreased -0.1% to £293,835 in September. With annual growth slipping from its long-term double digits to 9.9% from +11.4% in August, could the UK property market’s growth path approach a dead end? pic.twitter.com/23pQBLZXxa

—Emma Fildes (@emmafildes) October 7, 2022

Rising mortgage rates are the biggest hurdle for buyers looking to get on the property ladder and those hoping to move up, he agrees. Myron Jobson, senior personal finance analyst interactive investor:

“Mortgage affordability is a growing issue for buyers. Mortgage rates have been rising in line with the Bank of England’s base rate increases, but rates have generally soared between one and two percentage points two weeks into the mini-budget.

The difference runs into the hundreds in terms of pounds and pence, and means buyers can’t afford as much for a house as they could 14 days ago.

Wales sees faster house price rises, but London lags behind

Welsh it remains at the top of the table for annual house price inflation with a rate of +14.8%, down from +15.8% in the previous month, says Halifax.

The average property in Wales now costs £224,490.

London it still has the slowest annual growth rate among UK nations and regions, with house prices rising +8.1% over the last year. But properties in the capital remain the most expensive, costing an average of £553,849.

House Prices in Halifax
House Prices in Halifax Photography: Halifax

Introduction: UK house prices fell in September

Good morning and welcome to our ongoing coverage of business, the world economy and the financial markets.

The UK property market is slowing down, and the government’s mini-budget crisis will make it worse.

That is the verdict from Halifax this morning. It reports that median house prices fell in September, by 0.1%, leaving the median property now costing £293,835.

The annual rate of house price inflation slowed for the third consecutive month, to 9.9% from 11.4%, the lowest rate since January.

UK house price inflation
Photography: Halifax

kim kinnairddirector in halifax mortgagesreports that home prices have been virtually flat since June as markets entered “a more sustained period of slower growth.”

Kinnaird warns that house prices will come under further downward pressure in the coming months, due to rising borrowing costs and the cost of living crisis:

While stamp duty cuts, a dearth of homes for sale and a strong job market support house prices, the prospect that interest rates will continue to rise sharply amid the cost of living contraction, plus the impact in recent weeks of higher home loan costs on affordability, are likely to put more significant downward pressure on house prices in the coming months.

Kinnaird He adds that “this will certainly be a cause for some concern for homeowners,” but notes that recent home price inflation has been unprecedented.

Slower growth is important to note in this context: since the start of the pandemic, average property values ​​have risen by around 23% (nearly £55,000) and single-family home prices have increased by more than £100,000. pounds sterling over the same period.

Interest rate expectations soared during the market panic that followed the mini-budget, with the Bank of England expected to raise rates towards 6% by next summer.

The average rate on two-year and five-year fixed mortgages rose more than 6% this week and is expected to rise further. That’s driving some people out of the market and leaving others facing a jump in payments when they remortgage.

⚠️ British house prices fell for the second time in three months in September in month-on-month terms and rising borrowing costs are likely to exert more downward pressure soon, mortgage lender Halifax said on Friday.

– Reuters via https://t.co/ymHY6x4lOb https://t.co/nyhjA4w7WL pic.twitter.com/QRLxnXja9l

— PiQ  (@PriapusIQ) October 7, 2022

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Yesterday, UK bank bosses expressed concern on the state of the UK mortgage market at a high-level meeting at 11 Downing Street.

Kwasi Kwarteng is now considering extending the government’s mortgage guarantee scheme to help the market. That scheme allows banks and building societies to buy a government guarantee on the portion of the mortgage between 80% and 95% of the value of the property, to protect them if a property is repossessed.

It also comes out today

The main event for the markets today should be the September non-farm payroll report, which will show how many jobs were created in the US last month.

Economists predict hiring has slowed, to around 250,000 from 315,000 in August, as rising interest rates slow economic growth. A weak jobs report could encourage the US Federal Reserve to scale back interest rate hikes, which could weaken the dollar.

With the current #US #market narrative being “bad is good”, markets are hoping for fairly weak non farm payroll (#NFP) numbers tonight.
However some commentators feel, #labour market weakness could take a while to happen. pic.twitter.com/0IITF7STPT

— Arjun G Nagarajan (@arjungn80) October 7, 2022

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The agenda

  • 7am BST: Halifax House Price Index

  • 7.45am BST: French trade balance for August

  • 9.30am BST: UK Labor Productivity for Q2

  • 13:30 BST: US Non-Farm Payroll report.

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