A BACKLOG in the housing market will see rising numbers of people left paying higher mortgage rates, a leading property expert has warned.

Jonathan Rolande from the National Association of Property Buyers said it was “inevitable” that more would be hit with increased housing costs at a time many can least afford it.

Mr Rolande said: “Right across the market, mortgages are becoming increasingly expensive and this will only now become more acute given last week’s interest rates rise. Many people are already being impacted and even more will inevitably be in the future.

It is leaving many borrowers facing the nightmare scenario of having to agree to pay hundreds of pounds more per month or lose out on a property. The shortage in available homes piles more problems on top. Recent figures show the share of mortgaged property transactions taking more than six months to complete has nearly tripled since 2019 and everything points to that carrying on for a little while yet. We urgently need to see that trend coming down.”

He added that the Bank of England’s decision to remove the need to ‘stress test’ mortgage applications based on much higher rates, means borrowers are likely to take even larger loans in the future, further heightening the risk.

However, Mr Rolande, the founder of property firm House Buy Fast, says there are steps people can take to mitigate the risk.

“Firstly, people should aim to use a broker,” he said. “They are your ally and a good one will remind you when you forget to do something. And don’t forget to reply to all requests for information, and there will be a lot, quickly. “Most lenders and solicitors are happy with email for everything except the important ‘wet signature’ forms so use email for a fast response and don’t let replies go to spam.
“If your finances are complex, be open and honest with the broker. The lender will find out anyway. It’s scary what they can see on credit reports.

“With online banking, most of us don’t have much official paperwork to prove our identity – so keep all recent council tax bills, bank statements, or tax demands as you’ll need to show them to your lender and solicitor along with a photo ID.
”

If you can pay for the valuation and admin fees quickly on a debit card, by phone if you can. Don’t send cheques. If you can, find something to buy chain-free. The fewer people involved, the less likely a delay.

“Finally, make it your mission to get the sale through. Explain to work that you might need time in the day to sort things out. With the rate of both price and interest rate increases, losing a home now will cost you a lot more than a few lost hours at work so be prepared to put the effort in and let it take over your life for a month or two.”
Mr Rolande’s comments come days after new figures revealed some of the issues currently impacting the mortgage sector.

According to an analysis by Hamptons, the share of mortgaged property transactions taking more than six months to complete has nearly tripled since 2019 to hit a record high of 13.9 percent this year.

This means that one in seven buyers is unable to complete before the six-month expiry date of their offers.

According to data from UK Finance, a lender trade body, there were 71,000 mortgage approvals for a home purchase in December 2021. Nearly 10,000 buyers will therefore this month be left scrambling to find new mortgage offers so that they can proceed with their home purchases.

If the rate continues over the next 12 months, more than 100,000 purchasers will be left in the lurch.

The delays will cost home buyers thousands of pounds more per year on their mortgage bills.

Since December, the Bank of England has made five consecutive increases to the Bank Rate, which rose to 1.25pc on Thursday.

This has pushed up mortgage costs dramatically. Even before the most recent rise, the average rate on a five-year fixed-rate mortgage deal had jumped from 1.5pc to 2.6pc in six months. A buyer purchasing an average-priced home whose mortgage offer expired last month would therefore see their monthly payments jump from £730 to £847 – an extra £1,404 per year.