Property Rescue Blog

At its last review the Bank of England decided to keep interest rates where they were, but does this mean we are at the top of the rate rise or do we still have some way to go?

Recent rate rises have been small but consistent and financial commentators are in general agreement that more is yet to come. The Council of Mortgage Lenders expects bank rates to be around 6.0% by the end of the year, but it points out that housing costs are not purely dependent on rates of interest. Other factors, such as employment prospects and income also have an effect on how much property costs, and with economic prospects looking positive house prices might just continue their upward trend.

There seems to be some evidence that recent interest rate rises have slowed the market a little, but if rates are to rise further this will have an impact both on those wanting to get on to the housing ladder and those who already have mortgages. People who have close to 100 per cent mortgages, or have benefited from introductory offers or fixed rates will find themselves having to pay a considerable amount more when these offers end. Combined with the effect of the interest rate rises it will undoubtedly push some towards possible bankruptcy.

There are options for those who are in this situation and we’ll be exploring some of these in the next bulletin. But if you face the possibility of having your home repossessed, are in mortgage arrears, or need to sell your home quickly and without fuss, contact Property Rescue. Their specialist advice will help you overcome your financial difficulties and move on. Contact them for more information.

The UK’s biggest lender, The Halifax, announced that house prices grew at their slowest pace during May with an increase of just 0.3% from the previous month. The figures for April had shown a growth of 0.9%, so this is a significant drop.

Perhaps the effects of higher interest rates are at last seeping through into the market place, although yesterday’s news that the Bank of England has chosen to keep rates static for now will be welcomed with a sigh of relief by those with costly mortgages.

What is less clear though, is the impact that will be felt later on this year as many fixed rate mortgages come to an end. Two years ago, interest rates were low and loans were on offer for around 3.5 or 3.9%. Some of these fixed rates are due to end soon and the hike in mortgage payments that will result when rates return to today’s levels is bound to leave some homeowners short of cash.

Most people will be able to cut back on expenditure and meet the new repayments but for a minority whose outgoings are already stretched to the limit, the sudden rise in mortgage payments could mean a cash crisis. If you are in a position where you can’t meet your mortgage payments and need to sell up quickly and move on, Property Rescue guarantee to make an offer to buy your home, no matter where it is or what condition it is in. Contact them for more information.