MORTGAGE borrowers are being hammered with higher costs as major lenders hike rates and pull top deals despite a recent cut to the Bank of England base rate.

In a blow to buyers, HSBC, Barclays, Santander and Nationwide are among the big lenders that have upped prices this week.

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Over the past month around 200 deals have disappeared from the market, in the biggest month-on-month reduction since July 2023, according to analysis from data site moneyfactscompare.co.uk.

In a blizzard of price increases this week, Nationwide has pushed up rates putting an end to its sub 4% products.

HSBC has now hiked rates twice within as many weeks.

At the same time, Santander has also raised for new and existing customers by up to 0.31%.

It comes after the Bank of England last week cut the base rate from 5% to 4.75%.

A reduction in central interest rates usually marks a fall in borrowing costs.

Yet, in an unexpected and unwelcome twist, mortgage borrowers are now seeing costs rise.

The average two-year fixed mortgage rate today is 5.44%, pushed up from 5.39% shortly before the Bank of England base rate reduction, according to data from moneyfactscompare.co.uk.

At the same time, the average five-year fix now sits at 5.17%, up from 5.09%.

Experts said the lenders are pulling back from the market to avoid being overwhelmed by demand in the wake of the cut.

Nicholas Mendes, technical director at broker John Charcol, said: “While many lenders have opted to maintain their existing rates to preserve business volumes and service standards, those offering competitive pricing have been forced to adjust likely due to applications levels.

“These influxes often stretch service levels, prompting rapid rate changes to manage demand effectively.”

Market rates typically used by lenders to price mortgages have also been increasing.

John Fraser-Tucker, head of mortgages at online broker Mojo Mortgages, said: “While the Bank of England’s decision to lower the Bank Rate last week might lead some to expect across-the-board reductions in mortgage rates, it’s important to understand that the mortgage market doesn’t always move in perfect sync with the Bank of England’s base rate decision.

“Fixed-rate mortgages, in particular, are influenced by a complex array of factors beyond just the Bank Rate. These can include the lender’s own funding costs, their view on future economic conditions, competitive positioning in the market, and even their internal goals for new business.”

Here is the full list of major lenders that have hiked rates this week…

BARCLAYS

From tomorrow (November 14) Barclays is increasing rates across purchase, remortgage and reward ranges.

Among other increases, the change will see a two-year 5.15% fee-free fix at 90% loan to value, jump to 5.49%

HSBC

In the second increase to rates in two weeks, HSBC has today raised the cost on selected two, three, five and 10-year deals.

The rise hits first-time buyer, home mover and existing customers switching deals.

COVENTRY BUILDING SOCIETY

The lender is tomorrow (November 14) raising tracker mortgage rates for buy-to-let borrowers, as well as closing applications to new borrowers.

NATIONWIDE

This week’s increases from the lender means that most of its sub-4% rates will also go above 4%.

For example, its five-year fixed rate deal with a £999 fee has jumped from 3.94% to 4.14%.

SANTANDER

Santander has upped rates by 0.29% on residential fixed rates for purchase, remortgage, and green products.

The move is u-turn after reducing some rates earlier this month.

TSB

TSB is upping rates up to 0.3% on selected two- and five-year deals. This includes first-time buyer and homemover deals, as well as remortgage products.

Rates now start from 4.32% for new customers.

It comes after the lender also increased selected rates by 0.10% two weeks ago.

VIRGIN MONEY

The lender has raised selected two and five-year rates by up to 0.15% this week.

Products now start from 4.29%.

RATE CUT

One smaller lender that has bucked the trend and reduced rates is MPowered Mortgages.

All of its two and three-year fixed rate mortgages have fallen by as much 0.28% for new purchase and remortgage customers.

For new purchase customers, the lender’s two-year fixed rates now start at 4.21% for 60% LTV with a £999 fee and three-year fixed rates start at 4.19% at 60% LTV with a £999 fee.

Should borrowers fix now or wait?

The volatile market could be a worry for anyone looking to move home or fix their mortgage in the coming months.

Most mortgage offers have a shelf life of up to six months, meaning that if you apply for a deal now the lender will honour the rate even if you don’t need it until early next year.

This is a good way to lock in rates and avoid added costs if prices keep rising.

If rates happen to fall in the mean time, you can then apply for another deal further down the line.

Nicholas Mendes said: “For clients nearing the end of their fixed-rate terms, it’s essential not to delay in the hope that rates will revert to levels seen weeks ago.

“Securing a deal now provides certainty in an uncertain market. There is always the option to review and adjust if circumstances change but acting promptly minimises exposure to further rate increases.”

The headquarters of Netmarble, one of South Korea’s leading mobile game producers, used to be called the “lighthouse of Gurodong”, the industrial district in western Seoul, because its engineers often stayed up all night to meet the deadline for game launches.

But Netmarble’s stressful work environment came under the spotlight following a series of worker deaths in 2016, sparking public criticism of so-called “crunch mode” — when developers in the IT industry put in long periods of overtime to finish a project.

And Netmarble was not alone. Naver, South Korea’s biggest search engine, came under fire in 2021, when a developer in his forties died by suicide, leaving a note indicating extreme stress from relentless overtime and workplace bullying.

Now, though, after these cases exposed apparent failures to care for employees’ mental health, a cultural change is afoot in Asia’s fourth-largest economy — albeit slowly. South Korea’s government has promised to overhaul the country’s mental health system, while big companies are providing mental health programmes for their staff.

“Following the tragic incidents in 2016, we have been actively working over the past eight years to encourage a healthier work-life balance for our employees,” says Seijin Park, Netmarble’s spokesperson. 

The company has eliminated the so-called “blanket wage system”, under which employees were forced to do overtime for free. It has also set up an on-site healthcare centre staffed with professional counsellors.

Naver, meanwhile, has established an internal human rights committee and says it regularly assesses its corporate culture. It also runs a counselling centre for employees and offers a free annual mental health check-up.

“Employees’ [personal] growth and wellbeing are directly related to corporate competitiveness,” Naver says. “We are trying to ensure that our employees can exert their best ability in their best condition.”

Experts say Korea’s wider work environment has improved since the country limited the maximum working week to 52 hours in 2018 and enacted a law in 2019 to crack down on workplace bullying.

“Productivity has become much more important for Korean companies as the work hours get shorter,” says Jeon Sang-won, who heads a workplace mental health institute at Kangbuk Samsung Hospital in Seoul. “Big IT companies are actively investing in employees’ mental care as they are increasingly aware of the seriousness of presenteeism as well as absenteeism.”

However, many workers still complain of frequent overtime and a hierarchical corporate culture. The country has among the longest working hours in the OECD, and accusations of bullying continue due to the rigid, top-down management style.

“I have to work overtime almost every day when it gets busy,” says a 34-year-old office worker in one of Samsung’s units. “I am exhausted because of high performance pressure. I really wanted to quit when an executive recently cursed at me.”

Like many other big Korean companies, Samsung — whose electronics subsidiary is ranked 49th on the Best Employers Asia-Pacific list — offers free mental health counselling.

The employee says he never used this because of fears that the information could be shared by his managers, but the company insists that the service is strictly confidential.

Young employees are frustrated with corporate culture lagging behind generational change

Samsung says it abides by legal working hours and supports its employees’ work-life balance. It also runs various programmes for their mental health and deals firmly with any reported verbal abuse.

Jeon estimates that 60 per cent of Korean employees’ occupational stress comes from relationship conflict, and attributes it to the value put on team work in Confucian culture. 

“They suffer from all kinds of conflict stemming from generational, gender and rank differences,” he says. “Especially, young employees are frustrated with the country’s corporate culture lagging behind generational change, while working mothers show higher occupational stress due to prevalent gender discrimination.”

DH Kim, a communications manager at one of the country’s biggest conglomerates, recently received external counselling for insomnia because of her heavy workload and conflict with her colleagues.

“It is so stressful to adjust to the collective culture,” she says. “For example, you have to attend a company dinner even if you don’t want to.”

Like Kim, many Koreans remain unhappy despite the country’s fast economic growth. South Korea’s suicide rate, at 27.3 per 100,000 people last year, is the highest in the OECD. And, according to the Ministry of Health and Welfare, the number of South Koreans seeking treatment for mental illness increased from 3.2mm in 2017 to 4.3mn in 2022 — a 35 per cent rise.

Last year, President Yoon Suk Yeol set up a committee to oversee new mental health initiatives. He also promised to offer free counselling services for 1mn people and to increase the number of mental healthcare facilities by the time his term ends in 2027.

But Jay Kwon, a senior counsellor at MindGym, which provides corporate wellbeing services, says companies are still too focused on performance to give mental health the attention it deserves.

“Employees in cutting-edge industries are more stressed because of stronger performance pressure, but these companies tend to care more about growth and profits than their employees’ mental wellbeing,” he observes.

Jeon believes Korean companies need to make a systematic effort to overhaul toxic cultures — but reckons most see money spent on conventional management consultancy and facilities as a better way to boost productivity than investments in mental health.

“Most top managers still shun consulting on corporate culture because they don’t want to reveal the dark side of their company,” he says.

However, he adds: “When a fish struggles to breathe, you need to change the water in the fish tank.”

MILLIONS of consumers with a mental or physical disability feel excluded from products due to accessibility issues from food packaging to clothing design and store layouts.

A poll of 1,000 adults with invisible and visible disabilities revealed over two-thirds (68%) have felt ignored by retailers and manufacturers.

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And 55% believe mainstream brands simply aren’t interested in making products that cater to their individual needs.

With some of the top issues being food packaging, which is hard to open, clothes which have poor sizing or awkward fastenings and stores with high shelves and poor lighting.

As a result, 76% are loyal to companies who offer a good range of accessible option.

While 80% claim brands could be missing out on millions of pounds worth of sales by not considering disabled consumers.

The spending power of disabled people and their households, known as the purple pound, is estimated to be worth a staggering £274 billion a year.

It also emerged that while 32% don’t expect to see a change from those in the fashion or transport sectors anytime soon – technology has made pace.

With the top tech innovations for people with a disability named as virtual assistants, smart home devices and wearable devices for health monitoring.

Katharina Mayer, head of LifeStyle Lab Europe at Samsung, which commissioned the research, said: “This research has highlighted the huge opportunity for brands to better understand the accessibility needs of consumers to provide greater access for people with disabilities in the UK.

“Companies are rarely able to test their ideas with diverse people with different needs, but this is a must”.

It also emerged 72% of those surveyed have had to abandon a purchase due to a product’s lack of accessibility.

But 56% would be willing to pay more for a product or service that fully met their accessibility needs.

When it comes to online shopping, 80% struggle with websites that are not optimised for accessibility.

While 30% battle through a poorly designed checkout process, and 22% bemoan a lack of text descriptions for images.

Samsung’s spokesperson added: “It’s time to re-write this narrative.

“When designers consider varied needs from the beginning, they don’t just serve people with disabilities – they create solutions that benefit everyone and that is the approach we take to inclusive design at Samsung.”

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

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Which companies do people most like working for in Asia-Pacific? The FT and Statista surveyed 50,000 employees to find out. Plus: long hours in Japan; caste and corporate India; China’s robot revolution; stressed-out South Korea; Australia’s costly childcare

Paul Cheshire (Letters, November 7) contends that agricultural property relief pushed up land prices. He says the price of farmland rose fourfold in the 20 years from 1992. But he forgets that during that period sterling M3 rose fivefold at a time when the UK economy was on its back.

Where else was this monetary incontinence, resulting from the total incompetence of the Monetary Policy Committee, to go but into asset prices, most obviously those in short supply like land? The steep increase in M3 accelerated for the following 10 years as did prices for farmland. At the same time inflation quite predictably rose into double figures. Economics is not known as the dismal science for no reason to the surprise of the MPC. Unlike scientists, economists adhere to economic theories that support their political views. As a result we have modern monetary theory, which is akin to scientists suspending the law of gravity.

Mark Tennant
London W2, UK