A South Yorkshire estate agent is urging calm as the media whips up a frenzy with its reporting of recent shifts in the UK mortgage market.
August has seen many major lenders withdrawing their lowest rate mortgage products from the market, reportedly in anticipation of an increase in the Bank of
England base rate. This has been portrayed by national media as cause to panic, despite Bank of England Governor, Mark Carney, suggesting that any rise will not come until 2016.
Home owners are worried about affordability and whether increasing rates will mean repossessions whilst first time buyers fear being frozen out of the housing market entirely due to the cost of lending.
Ian Butcher, principal of Butcher Residential in Barnsley, has been in the property industry for around 40 years and is advising both home owners and house hunters to relax and take their time to make a decision about their mortgage.
“The current Bank of England based rate is completely unprecedented and it’s true that there is only one direction in which rates will go – and that is up. However, this will happen gradually – they aren’t about to shoot up overnight.
“An increase of 0.5 per cent will translate to a small rise in monthly payments.
“Owning a property is all about making your mortgage work for you. Many people have taken advantage of this long period of low rates to increase their monthly payments, increasing the equity in their property and giving them a much stronger position when rates do finally rise.
“When mortgage rates begin to increase, it is time to review your mortgage and possibly consider a fixed rate product. There are so many options out there these days – it’s all about being savvy and realistic. A mortgage is still a great, low cost, long term loan, and generally a cheaper option than renting, and with rates still incredibly low – it’s a great time to buy.”