For a number of years, UK property buyers have been taking advantage of low interest rates to secure themselves a lower repayment rate, making the process of getting onto and moving up the property ladder much more affordable.
However, in the last year, it has become more difficult to even get a mortgage thanks to the increase in rules that were implemented for the industry in the wake of the Mortgage Market Review. These new regulations meant that lenders had to be more scrutinising than ever over personal finance and spending history when it came to processing a mortgage application.
And now, mortgage customers could be about to experience mortgages that are not only harder to obtain, but also more expensive, as providers start to increase rates in the run up to expected action from the Bank of England.
The central bank is expected to raise the base rate for the first time in a number of years within the next few months, and mortgage lenders are looking to get ahead of this change by making sure their products already fall in line with the expected outcome.
The expected increase in the base rate is not expected to kick in until the start of 2016 at the earliest, but research by comparison website MoneySuperMarket suggests that since the bank’s governor Mark Carney suggested just a few weeks ago that rates could rise, some of the cheapest mortgage prices around have started to climb in price.
While most of the standard priced products remain the same for now, the first climbs at the lower end of the price range suggests lenders are starting to alter their strategies to compensate.
Dan Plant, consumer expert at MoneySupermarket, says that these early changes should be seen as indicators of intent from the big lenders, and he advised customers that one of the results of this is that they should start to look at properties, as now is the right time to buy before prices in general start to climb.
"It’s prime time for those looking for a mortgage as there are still some great deals on the market even if it’s a bit bizarre that you can currently get a cheaper deal with a smaller deposit," he said.