Buying houses and flats in the South Hams is becoming ever more expensive. House prices locally are already under pressure due to the spectacular scenery and quality of life which has attracted many second (or third or fourth) home owners especially from London to snap up local properties.

Mortgage interest rates started to increase last year, this is likely to make borrowing more expensive for those with fixed-rate deals coming to an end in 2023. Those with variable rate mortgages and private renters are also facing higher housing costs.

The majority of fixed rate mortgages in the UK (57 per cent) coming up for renewal in 2023 were fixed at interest rates below two per cent. Those deals that are due to mature through the course of 2024 will be from two-year fixed rate deals made in 2022 and five-year fixed rate deals made in 2019, when mortgage rates were generally higher than two per cent.

Most fixed rate mortgage deals coming to an end in the next 12 months were set at interest rates below two per cent.

In the first quarter of this year (Jan to Mar 2023), 353,000 fixed rate mortgages will have to be renewed. Calculations, based on Bank of England (BoE) transactions data, suggest that the number of fixed rate mortgage deals coming to an end in 2023 will peak in Quarter two (Apr to June) 2023.

BoE data also show that most mortgages are agreed at a fixed interest rate, where the interest rates stay the same for the duration of the mortgage deal, with 86 per cent of outstanding UK mortgages being repaid at fixed interest rates in Quarter three (July to Sept) 2022. This is up from 51 per cent in Quarter one (Jan to Mar) 2016.

While interest rates have been increasing since the start of 2022, most fixed rate borrowers have been insulated from those increases, as the majority were fixed at interest rates below two per cent and are still within their fixed-rate period.

Those on a variable rate mortgage, where the interest rate varies over the course of the repayment term, will have already seen higher interest rates as a result of market conditions including rises in the BoE base rate (the “Bank Rate”).