While there are many things that cause homeowners to stop and worry, changes in interest rates are high on the list. There was a ten-year period where interest rates were stable with no increases but this changes in November of 2017. In August of 2018, there has been a further increase, with the base rate now standing at 0.75%.

Historically, this is a low base rate and the change doesn’t represent a sizable change but anything which sees people paying more is a cause for concern. There is also the fact that prospective buyers need to consider how this increase will impact on their ability to obtain a mortgage and then pay for it.

Be aware of what interest rate increases will do to your monthly payments

A change in interest rates is going to concerning for homeowners who hold a variable rate mortgage. It is believed that the average homeowner who has £200,000 to pay off on their mortgage would see their mortgage repayments rise by £300 over the course of the year.

For some people, an additional £300 each year would place significant pressure on to their finances, so it is vital that individuals and households are aware of how changes impact on them.

Emoov are a company that always has a lot to say about issues impacting on the property market and Russell Quirk of the company released a statement, saying; “Mark Carney really is pulling the rug from beneath the nation’s aspiring and existing home owners. The Government’s failure to build any meaningful level of housing stock is pushing prices ever higher and now the Bank of England has hit them with an increase in interest rates that will see mortgage payments increase, while resulting in a pitiful return on their savings.”

Be prepared and get ready for further changes

While there will be many homeowners who think they can handle the most recent increase in rates, homeowners and prospective buyers should pay attention. Interest rates are now at the highest level they have been in over 10 years and there are many observers in the market who believe that further increases could follow.

Now is the ideal time for property owners and prospective owners to review their finances and make sure that they are ready for whatever comes. This isn’t the time to panic but being proactive in the property makes sense as this will provide you with confidence in your actions.

If you are keen to stay in touch with property market developments, including interest rate developments, we are here to assist you. As Stockport property specialists, we are here to make a difference. If you are looking for assistance in this area, give Spencer Harvey a call on 0161 480 8888 or send us an email at info@spencerharvey.co.uk. For a free valuation please visit: https://www.spencerharvey.co.uk/valuation-enquiry.html