13 Jul 2022
There is growing pressure on home owners with the Bank of England estimating that around 40% of mortgages will go up over the next 12 months as the central bank continues to increase interest rates.
A rise in borrowing costs, and the anticipation of further hikes in the coming months, are already causing the property market to slow.
Capital Economics forecasts that UK house prices could fall by up to 10% as the Bank of England increases interest rates to curb soaring inflation.
Sarah Breeden, executive director for Financial Stability Strategy and Risk at the Bank of England, told MPs at the Treasury committee yesterday: “20% [of mortgages] are floating so they will see the interest rate increase come through immediately.
“Of the 80% that are fixed, our data suggests that around a quarter of those come out of that in the next 12 months. Of that 100% stock of mortgages actually only 40% are going to see higher rates in the immediate period ahead,” she added.
But she admitted that more of that “will pass through over the next year” as more fixed rate mortgages come to an end.
However, the Bank of England said although UK households will be squeezed on their mortgage payments, it will not be as bad as during the financial crisis of 2008.
“We have picked up from some reports from consumer credit funds around the country of some increase in costumers wanting to rearrange their payment schedules,” Bailey added.
Thank you for reading
Need to discuss your issue? Confidential Call: 0208 088 0788 now.
Or fill in our contact form here.
Keep up with the latest from Landlord Licensing & Defence…
Subscribe to our YouTube Channel to find all our videos on Regulations, RRO, HMOs and much more!
Join our private Facebook Group where you’ll find a support network of other landlords and experts as well as case studies and how to avoid council fines.
Follow us on Social Media for the latest in Property and Licensing…