Rate Rise, but borrowing continues
Published on 06/07/2007
The recent base rate increases might have slowed down the house price growth in the UK, but they will not dent the mortgage demand, according to a recent survey of financial advisers.
The increase in May was the fourth since August 2006, this took the base rate up to 5.5% and the most recent figures from the Halifax are indicating that last month the rate of house price growth subsequently fell for the third time in a row.
However many financial advisors are saying that the increase in rates will not have an effect or they might even have a positive impact on borrowing levels, according to recent survey by Paragon, with lending typically predicted to grow by six per cent over the next year.
The future for buy-to-let is looking good, with 40% of landlords saying that the interest rate rise will not have an effect on them, while more than one in eight are claiming it will make them more determined than ever to invest in new property.
John Heron, the head of mortgages at Paragon recently commented that landlords are in a good place to survive this run of rates hikes, due to a continual demand for rental accommodation, but he wisely, he does advise all landlord to continually review there mortgage deals and to seek out mortgages that are best suited to the current situation.