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‘Families in utter shock’ as mortgage rates top 6%
We look at the deeply painful period ahead for local homeowners
Dear Millers, welcome to our briefing, which is so varied, eclectic and maddeningly unpredictable that it will remind you of this weekend’s weather. There are glorious recommendations, terrifying mortgage statistics and a tempting narrowboat which is on the market for £90,000. Imagine how cosy that would be in a stormy downpour (up to a point).
In case you missed our weekend read, Mollie has been following the movements of Students Against Tyranny, a far-right group organising protests in Manchester. They have been coming up here from Cardiff in the name of John Christian, a PhD student who was expelled from the University of Manchester, allegedly for his unsavoury views. But how much does Christian know about the protests in his name? Or, to ask the question posed by a few of the people Mollie met, does he even exist?
“What a great read. Incredible work,” commented one reader, while another wrote: “Excellent article, although giving someone an opportunity to defend themselves against clearly damning evidence in their own videos is possibly excessively fair journalism.” Another responded: “I think it's good journalism, and it gave him enough rope to show his true colours.”
Last week, Mill members received two great pieces. First, Jack spent some time with local landlords, who are having something of a PR crisis at the moment amid rising rents and scandals around poor quality housing. “Now a landlord is considered a pariah, a person who sucks the blood out of a tenant,” one landlord told him (cue the world’s tiniest violin). Then, our intern Kate Woodmass, spent some time with Manchester’s growing sober community to understand what life is like without booze in a city celebrated for its nightlife. Is Manchester going sober?
To read those pieces and get access to our entire back catalogue of articles and very fun events, join us as a member today. It was so lovely to see so many of you at our third birthday celebrations last week and we’ll be doing plenty more events in the months ahead including interviews with authors and public figures. If you haven’t joined yet, just hit the pink button below — it’s only £7 a month…
Fancy visiting a secondhand fashion supermarket?
From today’s sponsor: Many of us want to live more sustainable lives but the question is always: how to go about it? Fear not, Millers, that question will be answered a thousand times over when The Sustainability Show comes to Manchester Central for an amazing planet-friendly event on the 8th and 9th of July. Pick up tips and tricks from eco experts and authors and hear from Strictly winner and conservationist Hamza Yassin and renowned low-waste chef Max La Manna. There will also be a “charity supermarket” full of secondhand fashion and lots of locally sourced food, drink and music. Get your free ticket now.
The big story: ‘Families in utter shock’ as mortgage rates top 6%
Top line: The mortgage market is the big economic story today as average two year fixed mortgage rates go over 6% and economists predict a deeply painful period ahead. We dig into what the experts are saying — and where the effects of rising rates will hit hardest across Greater Manchester.
Driving this news: The Bank of England is expected to raise interest rates this week — for the 13th consecutive time — and economists expect further rises this year as the bank battles persistent inflation.
State of play: That is feeding directly through to mortgage rates, with the average rate on a two-year fixed deal rising over 6% this morning for the first time in half a year. “It takes average two-year fixed mortgage rates back towards the levels seen in the chaos after the mini-budget last autumn (when they hit 14-year highs),” notes the Guardian. 2.4 million fixed-rate mortgages are due to expire by the end of next year.
Rishi Sunak has ruled out offering extra help to mortgage payers with their ballooning monthly payments, arguing that doing so would increase inflation.
Shock: The BBC’s economics editor Faisal Islam says his colleagues have been “deluged with examples of families in utter shock at hikes in mortgage rates of hundreds of pounds per month.” He writes:
The news from the mortgage market is grim. Spend any time in the office of a mortgage broker over the past week and you hear words like “shocking” and “terrible” as they join multi-thousand digital queues to try to snaffle the last few bargain fixed-rates deals available on their systems. Banks have been pulling entire rosters of mortgage deals without notice at weekends on multiple occasions within a week. Some describe customers who failed to get organised six months ago as “feeling sick”.
Sales falling through: Experts also expect deals to fall apart in the coming months as first time buyers sit and wait. “Rising mortgage rates will hit the buying power of new buyers who don’t have a mortgage arranged,” says Richard Donnell, director of research and insight at Zoopla. “Those who were going to move but for less needs-based reasons may look to pull out of deals and wait over the summer.”
Uneven impact: How can we expect the mortgage crisis to play out in Greater Manchester? Very unevenly, according to data we’ve looked at this morning from the Office for National Statistics.
Look at the graph below, showing the percentage of households with mortgages (the darker the pink, the higher the proportion).
In central Manchester and Salford, where many residents are renting privately, fewer than a fifth of households have mortgages. Of course, increasing mortgage rates are one of the factors driving rent increases as landlords pass on the cost of more expensive buy-to-let deals.
You will also spot white bits of the map further out, for example in parts of central Bolton and Rochdale, where you see high levels of social renting.
Mortgaged up: But then look at the dark pinks in places like Altrincham, Heald Green and Lowton, where more than 40% of households have mortgages — generally leafier areas with lots of houses. Many residents in these areas are going to be dealing with horrifying new mortgage payments soon if they aren’t already.
Price impact: How will that impact house prices in those kinds of areas? It’s a bit early to tell because the mortgage armageddon is playing out gradually (can an armageddon be gradual?) as people’s mortgage deals run out. Rightmove says that across the country asking prices fell this month — something we haven’t seen for six years.
Local picture: Over the past years, Rightmove says prices have been rising in Manchester despite falling in London.
“Sold prices in Manchester over the last year were 8% up on the previous year and 19% up on the 2020 peak of £255,812,” the site says.
An MEN article about the areas “where house prices are falling drastically” says it’s now cheaper to buy in Altrincham, Broadbottom, Castlefield, Marple Bridge, Pemberton and Collyhurst than it was a year ago.
Bottom line: We’ll have to see how rising rates impact the local property market, but spare a thought in particular for first-time buyers, of which there have been many in Greater Manchester in recent years as the economy has expanded. First-timers stretch more to buy their home and tend to pay higher interest rates because of lower deposits. Very few could have predicted that their 2% rates would spiral up to 6%, and they are now more likely than other owners to go into negative equity. Grim times ahead.
If you’re struggling with the mortgage crisis, please get in touch with us to share your story — just hit reply to this email.
🌦️ This week’s weather
No signs of another heatwave this week, but the weather will remain warm with occasional showers.
Tuesday 🌦️ Morning rain will gradually clear to sunny spells & showers. Cooler. Max 21C.
Wednesday ⛈️ Sunny spells and scattered showers with a risk of thunderstorms during the afternoon. Max 22C.
Thursday 🌤️ Warmer with sunny spells and the odd shower. Max 23C.
Friday 🌤️ Very warm and mostly dry with hazy sunshine. Max 25C.
Weekend 🌤️ Remaining very warm with plenty of sunshine. Temperatures 24-27C.
You can find the latest forecast at Manchester Weather on Facebook — daily forecasts are published at 6.15am.
Your Mill briefing
71% of people in Bolton reported high or very high anxiety in 2022, according to a new survey. Nationally, this figure is less than 40%. According to the results, poverty levels are also rising: the proportion of Bolton families living in poverty (families whose income is 60% or less of the median income) is now at 22%, up 4.7% from 2014/15 and significantly higher than the England average. Linda Thomas, the council’s executive member for adult services, health and wellbeing said: “Improving the town’s health is a priority and needs to run through everything we do. This Public Health report creates a rallying cry to set a positive direction to achieve this for everyone in Bolton.” You can read the report in full here.
Two childhood friends, referred to as Girl A and Girl B for anonymity reasons, appeared at Minshull Crown Court this week, where eight men from Rochdale are on trial for child sexual exploitation offences against them, which occurred between 2002 and 2006. The court heard that Girl A told a friend that what happened to her was “so much worse” than Three Girls, the BBC drama about child sexual exploitation in Rochdale, and that she was filmed being sexually assaulted. The eight defendants all deny the charges. The trial continues.
A sad story in the MEN about the closure of North Tea Power, an artisan tea and coffee shop in the Northern Quarter that opened in 2010 and became much-loved among local coffee aficionados. Artist couple Wayne and Jane said they wouldn’t survive the summer, adding they could no longer keep pace with how the Northern Quarter is changing. Wayne said: “Everything seems to have changed, everything is kind of slick — new coffee shops opening now look like hotel lobbies. People now expect something more corporate, people wait to be seated and expect table service, it never used to be like that.”
And finally: Talking of slick coffee shops, we note that a unit has become free right in the middle of St Ann’s Square. It’s well known that momentum has been building for a Mill cafe in recent times and yet no great coffee shop operators have yet stepped forward to partner with us on this much-needed venture, taking all of the financial risk in return for unlimited free publicity in this newsletter and the guaranteed patronage of our community. This must change before Millers begin rioting in the streets, angrily hurling their oat milk caramel frappuccinos at the glass facades of every Starbucks in the city centre. So get in touch.
Home of the week
A one bedroom narrowboat, currently moored in Castlefield, is on the market for £90,000. It has a cosy double bedroom, a futon-sofa-bed, central heating and dog friendly barriers between the boat and the water. The safety features for cats are not specified.
Our favourite reads
The family of the anti-poverty campaigner Karen McBride, 46, believe the failings of multiple agencies led to her suicide, as this moving story in the MEN recounts. When she moved into social housing in Tameside, she was tormented by letters, sent erroneously, that said she was in benefits debt. Her house was filled with black mould and pigeons nests and the man who helped her move in was said to have told her “I wouldn’t even let a dog live here”. When her benefits were cut off, she was at her lowest ebb and told her children it felt like nothing would ever change. Her daughter, Codie, told the inquest: “This happens when funding is cut to vital services, ineffective procedures are adopted by agencies and an institutionalised poor perception towards those who are in receipt of benefits or living on the breadline is adopted.”
Why did Polish far right politicians and activists host an event at the Polish Social Centre in Bury last week? The event, the latest in a string of appearances by Polish far-right figures in the UK in the last decade, was attended by the Polish MP Janusz Korwin-Mikke, who has suggested women do not deserve equal pay because they are “smaller, weaker and less intelligent” and rallied against LGBTQ “propaganda” in schools. Rafal Pankowski, the head of a Polish anti-racism organisation, says it is “alarming” that these groups are finding a receptive audience among a small minority in the UK. The Polish Social Centre in Bury did not respond to VICE’s request for comment.
The return of the tasting menu — The Guardian
“The tasting menu comes with baggage: notions of dictatorial, egomaniac chefs, pompous staff and conspicuous consumption in hushed dining rooms,” writes Tony Naylor in the Guardian. But in fact, the new wave of restaurants offering tasting menus appear much more relaxed and sustainable. The piece credits Joseph Otway, chef at Higher Ground in Manchester, with using tasting menus to help him manage costs while also thinking about how a customer can get the full culinary experience. Otway says: “It’s the best value we can offer, and the best way to show a curated snippet of everything we’re about.”
Stuart James Remembered — Manchester Confidential
One from the archives. This is a moving and sensitive obituary to Stuart James, the tour manager of the Chemical Brothers and member of the “postwar generation”, who died in 2015 after a long period of illness. It’s written by the writer and longtime Miller Phil Griffin, who remembers spending time with James at parties in south Manchester and drinking champagne together in Brussels. “He twinkled, and his high cheeks that always seemed full of bubbles, hoisted a sly smile.”
Photo of the week
Our to do list
🥘 Intellectuals, contemporary artists and foodies have joined forces to create Dining In, a new exhibition at the Portico which offers a glimpse of what Manchester’s food scene was like in the 19th century, a time when the city was colliding with global cultures. There will be home cooked meals, books to leaf through, art and plenty of intellectual discussions on offer. It’s free.
🎨 The renowned visual artist Stephen Snoddy has created a retrospective of his paintings for a new exhibition at Saul Hay Gallery in Castlefield. His work is described as “carefully structured and contemplative”, asking viewers to consider the relationship between separate pieces. It’s free to visit.
🎭 The Royal Shakespeare Company’s production of Julius Caesar is showing at the Lowry this week. The production is a modernisation of the original political thriller, drawing in a range of influences, from Mexican Zapatistas to Welsh nationalists, to show how power corrupts. Tickets are £15.
🎧 There’s an early evening rave at the Science and Industry Museum, headlined by Space Afrika, best known for their strange, electronic soundscapes inspired by Manchester’s industrial architecture. Tickets here.
📽️ Cafe Blah, a French-inspired hangout in Withington that hosts free weekly film clubs, is showing the American neo-noir drama To Live and Die in LA. More here.
🎤 A new original musical at Hope Mill Theatre in Ancoats celebrates the life of Julie D’Aubigny, a worshipped opera singer and LGBTQ+ icon who seduced nuns, burned down convents and innovated new forms of opera — all before she turned 30. Tickets here.