The housing market in London is moving and moving fast. Positive values, figures and facts have started to surface about the shape of the UK economy in 2013 and even brighter forecasts have been scheduled for 2014. We will look into how this may affect the property market over the next couple of blog posts.
Mark Carney governor of the Bank of England has reiterated that UK interest rates would not return to the pre-crisis levels of 5% and that base rate interest rates will not be increase to coincide with the drop in the unemployment rates.
Reports in the Guardian suggest that they could rise as early as next spring. Martin Weale of the Bank’s Monetary Policy Committee (MPC) has forecasted that after this initial hike, interest rates will continue rise gradually.
If interest rates rise, then mortgage borrowers on a variable rate mortgage or debt on a fixed interest rate could be affected.
If you are on a variable rate mortgage you are exposed to any increase in the bank bass rate. You should try and work with the bank to find the best solution or use the mortgage calculator like this to see where you stand.