Brokers are anticipating Government intervention in the mortgage market as increasing rates look set to create difficulties for first-time buyers and homeowners looking to remortgage.
It comes at a time when rates have increased significantly following economic turmoil following the Government’s mini-Budget.
Brokers have also said that they expect availability of 95% mortgages to dry up as lenders hedge against risk.
Mark Dyason, founder of the mortgage broker Edinburgh Mortgage Advice, said: “95% loan-to-value mortgages are vital for first-time buyers. The main issue for lenders is the risk and capital required to fund 95% loans.
“Don’t be surprised if we see the launch of a new Mortgage Support Scheme from the Government to aid this sector and keep the oxygen flowing into the whole housing market.”
Graham Cox, founder of the Bristol-based broker, SelfEmployedMortgageHub.com, added: “Without some sort of government intervention, I think it’s a nailed-on certainty that lenders will withdraw their 95% LTV mortgage products, for fear of borrowers falling into negative equity.
“No doubt Truss and Kwarteng will provide another backstop, though, for their bank and housebuilder friends.”
