The impact of a rising climate of interest rates is beginning to be felt in the housing market, leading to a decline in the number of first-time buyers looking for interest only mortgages . It is possible that the near future will see an easing of activity in the housing market, particularly with further interest rate increases a possibility in the next Bank of England monthly decision.
The 5th April, in just under a week, may see first-time buyers and other borrowers hit by increased mortgage loan repayments as rates climb still further to 5.5 per cent, the highest cost of borrowing in over four years. This will mark the fourth increase in interest rates since last August.
What affect this will have on house prices remains to be seen, but there are some signs that the market is slowing down. However, house prices are still expected to climb this year. The effect of climbing interest rates on the housing market has been enormous in the United States, particularly the sub-prime market, the influence on the UK following the housing boom remains to be seen.
Interest rate increases affect mortgage market
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Interest rate increases affect mortgage market
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