Push for ‘locked in’ mortgages due to interest rate increases

There has also been increased activity in the UK mortgage market but this has been put down to homeowners rushing to secure fixed-rate deals – thereby avoiding the expected knock-on effects of the Bank of England’s response to rising inflation.

In the second quarter of 2022, house prices in Northern Ireland were rising at a rate of just over 15%, however by the end of the third quarter that had slowed to !0.1%, according to the Nationwide’s House Price Index.

The turmoil in the mortgage market is one of a number of financial services affected by the economic fallout from last week’s mini-budget.

Since then, many mortgage products have been withdrawn without warning as interest rates increase.

Nationwide Building Society reported on Friday that house price growth stalled month on month in September, but, on an annual basis, UK-wide property values were still 9.5% higher than a year earlier.

Robert Gardner, Nationwide’s chief economist, said: “Headwinds are growing stronger suggesting the market will slow further in the months ahead. High inflation is exerting significant pressure on household budgets with consumer confidence declining to all-time lows.

“Housing affordability is becoming more stretched. Deposit requirements remain a major barrier, with a 10% deposit on a typical first-time buyer property equivalent to almost 60% of annual gross earnings – an all-time high”.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “The sudden leap in house purchase mortgage approvals in August to their highest level since January likely reflects people attempting to secure loans ahead of expected increases in mortgage rates, rather than a fundamental strengthening of demand.”

Founding director of Revolution Brokers, Almas Uddin, said: “Mortgage approvals have continued to climb skyward in recent months, despite mortgage rates increasing in line with numerous base rate hikes by the Bank of England.”

New figures also show that households continued to deposit less money into their bank and building society accounts than they did before the coronavirus pandemic.

The ongoing cost of living crisis has prompted a call for young people to be given “a strong financial education” at school.

According to the Young Enterprise body, the current difficulties could be as financially damaging as the Covid-19 pandemic.

Speaking at an event at Stormont this week, Young Enterprise charity chief executive Carol Fitzsimons said that while many young people has shown great resilience during disruption caused to the their education by the pandemic, many of them now face an even greater challenge – stepping into adulthood without a strong financial education.

“Now, more than ever, we need to see young people develop financial wellbeing in the face of the greatest financial crisis of their lifetime,” Ms Fitzsimons said.

“With support from key stakeholders, including Department of Education & Money and Pensions Service, we are aiming to focus the minds of our education sector to equip young people with the tools they need for an uncertain financial future.”

The Stormont event gave the charity the opportunity to present its financial education resources to educators and students across primary, post-primary and special education needs sectors, which with support from the Money and Pensions Service (MaPS) and Money Saving Expert have been made available at no cost to all schools in Northern Ireland.

Education Minister Michelle McIlveen said: “As one of my department’s key delivery partners, I thank Young Enterprise Northern Ireland for the significant role they play developing the skills and qualities that our young people need to enhance their enterprise and entrepreneurial skills.

“Northern Ireland was the first region in the UK to include financial education in the curriculum and the timely launch of these learning resources are a welcome addition to the current offering on the topic.”