Property Articles

On Thursday, the Bank of England has decided to raise interest rates by 0.25 point to 5.5%, highest point in six years; as widely predicted by many analysts.

This is the first increase since February and is expected to tackle the inflation rate as well as the ever-increasing property prices.

Some homeowners are already feeling the pain of increased mortgage payment, with fears of more rate rises to come as early as next month.

Commenting on the decision, the BSA’s Director-General, Adrian Coles, said;

“Consumers should not panic as a consequence of this rise, but should try to assess how it will affect their finances. For people on variable rate mortgages, the increase in the interest rate will see their mortgage payments rise.

“For some, especially people who have also taken out personal loans or credit cards, this could mean a problem paying the mortgage.

“If this is the case then they need to contact their building society as a matter of urgency. When they do, they will find a sympathetic response and help to get their finances sorted. This could include rescheduling their repayments. Talking to your building society is particularly important as further rate rises are still a possibility.

“Not paying your mortgage can put your home at risk. Building societies want to avoid this if at all possible.

“For the 55% of building society mortgage holders who have a fixed rate product, the rate rise will make little immediate difference.”

Adil Akkus, the director of Appleton Estates said: “If the current interest rate trend manages to cool down the property prices, it may increase the rental demand among the potential first-time buyers.”

Remember, your property may be repossessed if you do not keep up payments on your mortgage.