How will rising interest rates affect the people of Fakenham?

5:42 PM September 29, 2022

A mortgage broker has warned homeowners they expect ‘one hell of a payment shock’ following the expected rise in interest rates.

Julie Memmory of Pro-Mortgages, based at estate agent Bailey Bird and Warren in Fakenham, said a number of people will be hit hard when their fixed rates come to an end.

The uncertainty caused by Chancellor Kwasi Kwarteng’s “mini-budget” prompted some lenders to pull mortgage products from the market.

And on Monday, the pound fell to a record low against the US dollar.

Julie Memmory, of Pro-Mortgages based in Bailey Bird and Warren in Fakenham
– Credit: Nick Bird

Ms Memmory said interest rates had already risen since the start of the year, adding that some mortgage products were now coming back to market with higher rates.

And she warned that borrowers coming to term on a fixed-rate contract would face significantly higher repayments after negotiating a new fixed term.

“If they get to the end of a fixed rate, they’re going to have one hell of a payment shock,” Ms. Memmory said.

“They can either opt for another fixed rate or an ever-higher standard variable rate.

Estate agent Bailey Bird & Warren on Bridge Street.

Estate agent Bailey Bird & Warren on Bridge Street.
– Credit: Google Maps

“Someone in the Fakenham area was paying £370 for the last two or three years, and now you would expect them to pay £480. Can’t get any better than that – a £110 raise.

“We have an affordability check to look at the interest rate hike, so hopefully most customers will be able to afford it.

“But, couple that with rising energy bills, it will be very tight for them.”

Nick Bird, director of Bailey Bird and Warren, said it was too early to say what impact there will be on the Fakenham housing market, but revealed little effect was being felt so far.

Fakenham's Nick Bird has been playing Santa Claus for 20 years, visitin

Nick Bird, director of Bailey Bird and Warren, said it was too early to say what effect Fakenham’s market will have
– Credit: David Pulling

“There aren’t many mortgage buyers in North Norfolk. People often leave London to retire and downsize, buying the house with the proceeds from the sale.

“There aren’t many first-time buyers in the area. People starting out often live in the Norwich and King’s Lynn area.

“It is possible that the rental market will be affected. If people can’t afford the mortgage they want, they’ll use the rental market, which puts more pressure on the properties you rent – forcing them [landlords] increase the rent due to high demand.”

Comments are closed.