Rolling coverage of the latest economic and financial news, as rise in borrowing costs hits UK house prices, household wealth and company finances.
Global bank HSBC has confirmed that the profit boost from higher interest rates has faded somewhat.
HSBC reported this morning that its net interest margin (NIM) dropped by two basis points in the last quarter to 1.7%.
Higher mortgage rates and the cost-of-living crisis have weakened buyer demand, which is languishing 25% below the five-year average in October. Transactions are being taken up by an increasing proportion of cash buyers up from 1 in 5 to 1 in 3 over the last five years. Many buyers are in wait-and-see mode, holding off for now, hoping that house prices will fall further, and mortgage rates will ease next year.
However strong wage growth, low unemployment and strict affordability testing rules have prevented an even steeper slide in house prices. Plus, there is a shortage of housing supply in the UK that is also stemming a more aggressive downturn in property prices.
