Expat mortgage broker predicts banks will not pass on full Base Rate rise to mortgage holders.
The increase in UK Base Rate from 0.50% to 0.75% at the start of August will have unnerved some expat mortgage holders and those considering an expat buy to let mortgage in the UK, but it need not, thinks expat mortgage broker Offshoreonline.org.
Offshoreonline thinks two factors are at play, namely concern over the total level of debt in the UK and the fact that many banks have been making above average margins on mortgages since the financial crisis of 2009, as they have had to rebuild balance sheets. That approach can now start to unwind, as banks such as Lloyds and Nat West finally return to a more normal and healthy status.
Figures published by The Money Charity earlier this year show average UK mortgage debt at its highest level on record at £123,292, to which can be added additional average unsecured debts of £8,000 arising from things like credit card borrowing and personal loans, according to figures in The Guardian. On top of this, data published by comparison site Finder.com in July 2018 shows 1200 buy to let mortgages are in significant arrears, defined as 10% or more of the outstanding balance. This figure is up 20% on the same quarter last year, suggesting a picture of a country maxed out on debt after a period of record low UK interest rates.
Offshoreonline spokesman Guy Stephenson thinks “Both the UK Government and the Bank of England will be well aware of these figures. They need to balance fears of runway inflation against a need to not tip more borrowers into serious arrears through higher borrowing rates, something which might trigger a rise in repossessions. As a result, we believe it is likely pressure will now be put on banks to limit mortgage rate rises wherever possible.”
Many commentators feel UK Base Rate must rise to something closer to 2% over time, but Stephenson believes not all of this needs to be passed on to hard pressed borrowers. Banks can now start to reduce their margins on mortgages from 4.99% over UK Base in some cases, to levels closer to those charged before 2009, when bank margins of 1%-2% were not uncommon.
“We have seen one banks lift its fixed rates by less than the 0.25% rise, another leave rates unchanged and we expect a third lender to only pass on a proportion of the total increase in lending costs,” added Stephenson.
« Back to News
Latest News
- Zoopla reports number of UK homes for sale at a six-year high, best buyers’ market for years
- Better expat mortgage rates lift property enquiries but poses fixed or variable rate expat mortgage question
- Where next for UK expat mortgage rates?
- Falling UK house prices and steeply rising rental yields spurs expat buy to let enquiries, reports broker
- Great time for US dollar earners and US residents to invest in European real estate
- Good news for expat UK house buyers, as expat mortgage rates start to ease
- Falling house prices, high mortgage rates – should UK expats buy a house now?
- The 5 cheapest cities for first-time buyers
- Why getting a mortgage in France is now so much easier for buyers from the USA than the UK
- Green shoots appearing in UK property market, good news for expat house buyers
- UK Housing asking prices see smallest February increase on record
- Optimistic signs in expat buy to let market as mortgages rates fall and prices stabilise
- Expat UK property investing: Three positive signs, thinks broker
- Expat buy to let market still strong after two rate rises, says broker
- Recovery and strength in the UK housing market for 2022?
- Expat broker optimistic on post Covid UK buy to let housing market
- Broker warns over mortgage payment holidays
- Buying UK buy to let property after lockdown – expats will have the upper hand, thinks broker
- Expat lenders react to keep expat mortgage deal flowing during COVID-19 crisis
- Coronavirus impact on UK housing might be short lived, thinks expat mortgage broker
- Getting a mortgage whilst living abroad or getting a mortgage after you have moved abroad.
- What Happens when my UK Expat Mortgage Expires?
- Buy to let bargains abound, thanks to Brexit effect, thinks broker
- Expats increasingly vulnerable to new build deposit loss
- UK house hunters lead 6% growth in French non-resident property transactions
- Expat Buy to Let Mortgage Rates Cut Again
- Brexit fears give expats the edge, as UK buyers shun property
- Mortgage tax changes in Spain help buyers
- Expat mortgage broker predicts banks will not pass on full Base Rate rise to mortgage holders.
- Falling Expat Mortgage Interest Rates and Weak UK Housing Market Favour Expat Buyers
- UK property beats pensions, says UK official study
- Taxes for UK expat landlords might not be so hard after all
- Why a sinking pound need not scupper your French property dream
- Is it time to add UK university fees to your expat mortgage?
- Resurgent Spanish property market prompts new mortgage launches
- The new landscape for UK property investors – still good value
- New UK Buy To Let Rules Will Impact Expat Property Buyers – 2017
- UK rent rises continue to outstrip inflation, expat buy to let remains popular
- UK Stamp Duty hike not as harsh as first feared for expat property buyers
- Do I qualify for expat or international mortgages?
- Brexit need not harm the expat mortgage market, thinks Offshoreonline
- UK stamp duty changes, capital gains tax changes will impact expat buy to let investors, so start planning your checklist now
- Booming London property rents continue to attract expat buy to let landlords
- New UK Stamp Duty Won’t Dent Appeal of Buy To Let Mortgages For Non UK Residents
- QE spells heaven for overseas property buyers in Europe
- Thinking about buying a house in 2015? For expats, the signs are good
- UK property prices on the up in 2015 good news for expat buyers
- UK Stamp Duty changes – the winners and losers
- French expat euro mortgage rates fall again
- New house price index to make life easier for French euro mortgage house buyers