17th November 2022

September 23rd Mini Budget

I think it’s fair to say that there has been nothing quite like this ‘mini budget’ and the immediate effect on the mortgage and housing market.

The purchase price at which stamp duty is payable has been increased to £250,000 in England.  Wales have followed suit and increased their Land Transaction Tax threshold to £225,000. Depending on the source, the average house price in Oswestry ranges between £228,000 and £260,000 meaning that most buyers will now pay little or no stamp duty.  The new rules came into immediate effect in England meaning that those already purchasing but not having completed benefited from this saving even though they had accounted for it.  In Wales, the changes came into effect on 10 October.

The Bank of England had already raised the base rate by 0.5% to its highest level since 2008 the day before the budget.  The reaction to the tax cutting measures by analysts and the International Monetary Fund (IMF) was on the whole negative and the pound fell against the dollar with predictions of further interest rate rises to come.   Mortgage lenders reacted quickly and one by one began to withdraw products and release new ones with higher rates.  For the first time in a long period, 2-year fixed rates are higher than 5-year fixed rates and some lenders temporarily withdraw all their mortgage products from sale.

There was a lot of scaremongering with some journalists indicating that offers were being withdrawn sending borrowers into a state of panic.  All those with formal mortgages offers were honoured however borrowers with mortgage deals expiring are finding their options limited and monthly repayments much higher.

Interest rates are predicted to continue to rise which may concerns those with fixed-rate mortgages due to expire.  Anyone with a fixed-rate deal expiring in the next 12 months would be advised to look at their options now.  We offer a no obligation review of your situation and there are often ways to reduce the monthly repayments.  The main thing is not to panic!

Your home may be repossessed if you do not keep up with your mortgage payments