Average mortgage rates reach highest level since start of the year

Average mortgage rates have reached their highest level since the start of the year, with 17 lenders raising rates on fixed deals by up to 0.4 percentage points. The average two-year fixed-rate is now 5.93% and the average five-year fixed-rate is 5.5%, the highest since January 2. Hina Bhudia from the mortgage broker Knight Frank Finance said: "We're talking about a slower and potentially shallower cycle of interest rate cuts from the Bank of England. Markets are expecting a new outlook in which the Bank makes one or two cuts this year rather than five or six". Bhudia said there were fears that rising rates could affect the housing market: "It could dampen demand just as the spring selling season should be gathering pace. The sun is out and buyers are returning after the Easter break, so we'd usually expect these to be the busy weeks before the summer, however the uncertain outlook for mortgage rates will undoubtedly weigh on activity".

The Sunday Times (05/05/2024)