There's a new divide in my generation - between the haves, who got a mortgage before Truss's infamous mini-Budget in 2022, and the have nots
As fantasies go it is a modest one, and an understandable one. We live in a nation where home ownership is venerated, and aspiring to it encouraged. Dreaming of a flat with a garden you can lovingly tend to without worrying your landlord will cite your improvements as a reason to hike up the rent, is a conventional, even expected, aspiration.
Not that any of us need reminding, but two-year fixes went from 4.74 per cent on 23rd September, the day of the mini-Budget, to 6.65 per cent a month later. Five-year fixes went from 4.75 per cent to 6.51 per cent. As of March 2024, a two-year fixed rate mortgage is at 5.76 per cent. In March 2022, the average was 2.65 per cent.
In fact, the ballooning of mortgage rates has, in some ways, made the bank of mum and dad less relevant. A deposit, whether saved, loaned or gifted, won’t change the fact that our salaries aren’t keeping up with inflation or house prices, or that monthly mortgage repayments have lept dramatically. And we shouldn’t expect an equivalent dramatic drop to happen any time soon, if ever.