First interest rate rise in a decade
Well we can’t say that we have not been warned. The Bank of England’s Monetary Policy Committee has hinted for some time that an increase over the coming months was likely. The bank have finally moved the Base Rate from 0.25% to 0.5%. As far as housing is concerned, the immediate impact will see tracker mortgage holders most affected as their deals will automatically increase in line with the base rate. Variable rates, however, are likely to follow suit. Whilst those on fixed rate deals are safe for the time being, the rise is likely to hit them when their term comes to an end.
The figures show that based on a 2% tracker on a £200,000 mortgage, the monthly payments will rise from £739 to £764. Overall home owners are facing an average increase of about £22 a month or £264 a year, so a minimal increase in many cases although the latest findings from the Financial Conduct Authority revealed that one in six borrowers would struggle if their mortgage repayments were to rise by £50 per month.
With the latest inflation figures showing a halt in the rise of recent months and commentators predicating the top of the curve as far as inflation is concerned, it seems unlikely that another increase in interest rates will take place for some time.
Locally, we have not experienced any drop off in demand for property due to the increase in interest rates, mainly because of its well-publicised likelihood and of course the limit of the increase. Although the festive season is nearly upon us, we are still very busy on viewings. There is also an increase in requests for Market Appraisals which could herald much needed increase in instructions in the early part of 2018.
May all of us at Winkworth take this opportunity to wish everyone a Happy Christmas and a Prosperous New Year.
Winkworth Dartmouth 01803 832288 www.winkworth.co.uk/estate-agents/dartmouth
First published By The Dart December 2017
