The UK housing market is under siege of rising housing prices, undersupply of viable housing options and a decrease in the amount of remortgages applied for.  Many concerns are swirling the housing market could be creating a potential issue for the rest of the UK economy.  That issue could come to a boil as rising house prices are causing more debt responsibility and less flexibility in personal family budgets.

An additional issue which is now attracting attention within the housing market is the increase in the interest rates of fixed rate deals, according to Moneyfacts.com.  The slight increase in the average interest rates covers the range of loan to value deals from 60% up to 90%.

Sylvia Waycot, Editor at Moneyfacts.co.uk, commented on the recent increase in rates, saying:

“These are not averages, they are the lowest rates being offered by lenders direct to borrowers for fixed rate mortgages and they are moving upwards - now. 

“Anyone taking the cheapest deal today will still get the cheapest deal, but it is going to cost more than it did last month.

“Fixed rate mortgages are finely tuned to SWAP rates which are, in turn, finely tuned to base rate speculation. The continual stop/start over when BOE base rate will rise has caused SWAP rates to increase, with the end result now showing in the direct-to-borrower market.”                    

Waycot added: “For the first time in a long time, the people with the biggest deposits are coming off worse as the competitive FTBs cheapest rates are the same as last month.

“Borrowers’ are literally set to pay the price of a rate rise before the BOE rate has in fact risen.”