Inflation Rises To 10.1%

by | Wednesday 17th Aug 2022 | Mortgage News

UK inflation has risen

UK inflation has risen to 10.1% (Source:


The office of national statistics (ONS) have confirmed that in July 2022, inflation has risen from 9.4% to 10.1%. This is now the highest it has been in over 40 years, indicating that a recession is almost unavoidable at this time. The Bank of England increased the base rate by 50 basis points to 1.75% on the 4th of August to tackle inflation however as of yet, it doesn’t seem to be doing much.

So What Does This Rise In Inflation Mean For The Housing Market?

As we reported in a recent article posted to our website, house price inflation has slowed down in recent months and it is likely that this trend will continue after house valuations and asking prices reached dizzying heights over the last couple of years. Despite house prices increasing between May and June 2022, annual house price inflation has slowed due to the rise in prices seen in June 2021, which were the result of stamp duty changes brought in during the pandemic, according to the ONS. The temporary changes to stamp duty, and land transaction tax last year may have allowed sellers to request higher prices as buyers’ overall costs were reduced, the ONS said.

Also reported by us last week for landlords, rents rose at the fastest rate for 6 years over the last few months as energy bill and cost of living crises hit the country. Rent paid by tenants increased by 3.2% in the last year. Again, something not seen in over 6 years.

Mortgage lenders have been and continue to raise mortgage interest rates across all of their products, seemingly on a daily basis and this is just another sign that the predicted stricture that a recession will have on the housing market and economy as a whole is something that lenders are carefully considering and perhaps already know a lot more about than they are letting on.

But it’s not all doom and gloom for property owners or people looking to buy a property in the near future. Mortgage interest rates are higher than we have seen for quite some time, there’s no denying that. And to a lot of people, it doesn’t seem like a wise move to do anything with a mortgage at the moment. But we don’t see that as the case at all.

Getting A New Mortgage When Inflation Is High

Now it’s important that we are very clear on this next bit. Taking out a mortgage or re-structuring your current mortgage is not something that everyone should do, and it should not be done without proper guidance. It is crucial that you speak to a mortgage expert before making any rash decisions as without the right advice, you could end up in a worse situation. As mortgage specialists, we offer all clients a mortgage health check for both new buyers and existing mortgage owners where our advisors will sit down with you either face to face or over zoom to discuss your finances and mortgage viability.

If you are completely new to the mortgage process, our advisors will go through your income and outgoings with you and first determine how much mortgage could be available to you. They will then talk you through property prices and the kind of property you might be able to afford. Afterwards, your advisor will go through the best and most beneficial mortgage products and rates that are available to you at this moment in time.

Because rates are quite high at the moment, our advisors will actually form a plan of action with you so that your mortgage benefits you in the short term and then will benefit you in the long term when mortgage rates inevitably go back down to lower levels.

If you are an existing mortgage owner, whether that is residential or buy-to-let, our advisors will do exactly the same thing. They will sit down with you and go over your finances and current mortgage deals with a fine toothcomb so that they can make sure that you are getting the absolute best deal out of your mortgage. They will also help you plan for when your current deal comes to an end. By this we mean that your fixed mortgage period could come to an end within the next couple of years, and the last thing we would want to happen is for you to either fall on to the ridiculously high standard variable rate or get stuck with one of your lender’s higher products that doesn’t work for your situation.

Our advisor will form a plan of action with you to keep your mortgage manageable even when your fixed rate ends and we will prepare your mortgage for when interest rates go back down again.

If you or anyone you know is concerned about rising inflation coupled with mortgages, please give our advisor team a call today for a free mortgage health check.

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