Worth noting as the quarter closes that the average two-year fixed rate is now approximately 5.1%, up from around 4.7% at the start of March. Five-year fixes have moved similarly. This is despite the Bank of England holding at 3.75% throughout Q1. The driver remains swap rates, which have been pushed higher by sticky inflation expectations and the Middle East situation. Approximately 1,500 products were withdrawn during March alone. Anyone locking in now is paying materially more than they would have six weeks ago.
This tallies with what I’ve been hearing locally. A couple we know through the sailing club had a mortgage offer agreed in principle in February and went back to the lender last week only to find the product had been withdrawn entirely. They’re now looking at rates 0.3% higher and wondering whether to wait it out or just bite the bullet.
The knock-on effect further down the chain is what concerns me. If buyers at the bottom start pausing, everything above them stalls. We’re mortgage-free so it doesn’t affect us directly, but anyone trying to sell into this market, particularly in the south where prices are already softening, must be feeling the squeeze. I suspect a few of the spring listings we were seeing a few weeks ago are going to sit there rather longer than the agents hoped 