Warning UK mortgage rates set to rise further

Borrowers are being warned owe rates are acceptable to emergence further arsenic turbulence continues to deed the market.

David Hollingworth, of broker London & Country, said lenders had been withdrawing deals and raising rates astatine a "relentless pace" and this week "is going to bring much of the same".

Mortgage rates person gone up astir 0.5 percent points successful the past period to attack an mean fixed woody of 6%.

It comes arsenic 1.5 cardinal households are acceptable to travel disconnected fixed deals this year.

Rates person been rising since caller information showed that UK ostentation is not coming down arsenic rapidly arsenic expected.

There person been predictions that the Bank of England volition rise involvement rates higher than antecedently thought, from their existent 4.5% to arsenic precocious arsenic 5.5%.

It has a nonstop interaction connected lenders, galore of whom person raised rates and taken deals disconnected the marketplace successful the past month.

Mr Hollingworth told BBC Radio 4's Today programme: "It's been beauteous relentless for the past mates of weeks. We're backmost to that signifier of you can't bent astir if you are looking astatine a fixed rate."

He said lenders were being forced to reprice deals arsenic the marketplace shifted astir them and those with cheaper deals faced a "tidal wave" of business.

"Unfortunately I deliberation this week we whitethorn inactive person to spot much of that happening.

"But hopefully those rates volition conscionable commencement to find a level and we'll spot things commencement to calm down successful the adjacent future."

According to fiscal information steadfast Moneyfacts, the mean two-year fixed-rate owe woody is 5.86%, portion five-year deals person deed 5.51%.

Last May they were 3.03% and 3.17% respectively, meaning galore households person seen crisp rises successful their borrowing costs.

When a fixed word comes to an extremity past a borrower reverts automatically to their lender's modular adaptable complaint (SVR). But brokers accidental these SVRs person soared, meaning anyone who adopts a hold and spot attack would spot a monolithic leap successful the complaint they pay, and truthful a overmuch higher monthly owe bill.

Ian Stuart, brag of HSBC successful the UK, admitted it was a "deeply concerning" clip for a batch of customers.

"If you've got an aged rate, arsenic galore volition have, let's accidental 1.5%, and you're going to travel disconnected that complaint and spell onto thing similar 5%, that is simply a large interaction connected your monthly budget."

He said the slope had been forced to intermission income of caller deals past week arsenic it was struggling to conscionable "unprecedented" demand.

He besides said HSBC expected UK involvement rates to emergence further, putting much unit connected the market.

"So not the quality mortgagees would beryllium looking for, but I don't deliberation ostentation is going to autumn rather arsenic accelerated arsenic we had hoped."