Martin Lewis warns homebuyers of soaring interest rates
The finance guru says first-time buyers shouldn’t buy a home now unless they’re fully prepared – as interest rates are set to rise to 6% next year
Martin Lewis has urged homebuyers to be mindful of interest rates as they are set to rise to 6% next year – the highest in 30 years.
The finance guru suggested first-time buyers not buy a home now unless they are fully prepared and plan to live in it for the long term.
Mr Lewis appeared on Good Morning Britain on Monday October 3 to answer questions about the property market amid concerns over interest rates and said it was difficult to be sure what will happen with the market housing because we “work with so many variables”. and “no firm answers”.
However, the Money Saving Expert founder said there were warning signs, including the withdrawal of hundreds of mortgage offers from the market last week and possible high 30-year mortgage costs.
He said on the breakfast show: “If you’ve got a decent deposit, and you’ve found a house you love, and you’ve got a mortgage you can afford, and you’re going to stay in that house property for a long time, go on, buy your house.
“If you’re doing this because ‘this isn’t the house I want but I think I should do this before everything goes wrong and everything goes wrong’ – don’t buy your house.”
He added: “There are no good firm answers and I apologize if we play this again in two years and I was totally wrong, it’s possible.”
Why are there concerns about interest rates?
The Bank of England’s current base interest rate rose in September and currently remains at 2.25%, but there is uncertainty about where rates are headed.
Economists further predicted a potential 15% drop in house prices and lenders halted deals as they were unsure how to value them in an unpredictable climate.
The base rate affects how much banks charge for borrowings, including mortgages, credit cards, and loans. People may soon find it harder to buy a home if mortgage rates rise and home prices are hit.
Huw Pill has urged borrowers to brace for a ‘significant’ rate hike after lenders Santander and HSBC, along with building societies Nationwide and Yorkshire, joined a rush of lenders to withdraw home loans or increase their rates. Buyers found themselves looking for a dwindling number of home loans.
What are the other concerns?
The Chancellor has since admitted that £45billion of debt-funded tax cuts under his budget had been delivered ‘at very high speed’, but he was convinced it was the right plan .
In another recent U-turn, the government deleted a stamp duty tweet claiming that a first-time buyer in London moving into a terraced house would save £11,250 on stamp duty and £1,050 on utility bills. household energy.
Mr Lewis called on the government to remove the ‘nonsense’ tweet as he publicly refuted its content. Responding to it on Twitter, he told his followers “this is nonsense”.
He wrote: “To make this saving on stamp duty you would need to buy a property over £500,000.
“With a 10% deposit, the cheapest fixed mortgage would cost £2,400/month (£28,000/year). How can someone with £30,000 afford that?”