Interest rate rises unlikely to affect mortgage industry
With two interest rate rises taking place in the space of a few months, between August and November 2006, some may have been concerned that the mortgage industry could suffer, with many unable to take out a mortgage at the current interest rate of five percent, particularly with a number of experts predicting that another rise is on the cards early in 2007. However, according to some officials the rises have not affected the industry in most areas, and is unlikely to do so.
One official from UCB Home Loans stated: "Latest figures from Nationwide show that average house prices increased by 9.6% in the year to the end of November somewhat higher than many people imagined would be the case, particularly when we consider the fact that the base rate has now risen to 5%. However, despite the fact that rate rises have had some effect on the self-certification and buy-to-let sectors, the majority of brokers are still reporting that business has been growing."
It is a concern with some people that first time buyers could really struggle to get onto the property ladder, with rising property prices and interest rates making it seemingly impossible to afford to purchase a property. However, with many banks and building societies offering longer repayment terms and higher income multiples, coupled with some great deals available on fixed rate mortgages, first time buyers could still get their foot on the ladder by choosing the right mortgage provider and type.
A recent survey carried out amongst mortgage companies revealed that eighty five percent of those in the business expect property prices to rise by the end of 2007, and only fifteen percent expect property prices to stabilize. The survey also revealed that only certain areas of lending had been affected by the recent interest rate rises, including buy to let mortgages.
More Information:
- Mortgage article here......
External Links: