Borrowers fear interest rate hike above anything else in 2014
More than one in four borrowers say their biggest concern for the housing market in 2014 is the threat of rising interest rates, according to the Building Societies Association.
The BSA Property Tracker survey, which samples 2,000 UK-based adults, found that 27 per cent of respondents fear an increase in base rate over anything else in 2014.
The survey also showed that consumers are more worried now about the affordability of monthly mortgage repayments than they were three months ago, with 46 per cent of people saying this is now a barrier to buying a property, up 11 per cent increase from September 2013.
In contrast, first-time buyers now have a more positive outlook about the housing market than they did three months ago.
Although saving for a deposit still ranks as the biggest barrier to owning a home, the number of first-time buyers who believe this to be the case has fallen from 66 per cent to 44, which the BSA says has been aided by the recent introduction of Help to Buy 2.
BSA head of mortgage policy says: “It is understandable that consumers are wary about a rise in interest rates in 2014, but unless the pace of economic recovery picks up considerably, it is unlikely we will see the bank base rate rise over the coming twelve months, and when interest rates do rise it is likely to be gradual.
“There remain plenty of options for a homebuyer to get greater certainty over their mortgage repayments, with 69 per cent of mortgage products available now at fixed rates.
“It is encouraging that first time buyers are feeling more confident about the housing market. Publicity surrounding Government schemes will have helped, alongside the increase in supply of lower deposit mortgages.”
This blog posting was extracted from Mortgage Strategy, however for more independent mortgage help and advice please do not hesitate to contact Clare Allen at Hoskin Mortgages.