As the interest rate of the Bank of England affects the real estate market in the UK?

Raising interest rates is the only and the biggest risk for the UK property market in the next year.

This conclusion was made on the basis of a survey conducted among the residents of UK. In the survey, 27% of respondents stated that the greatest concern among them is the affordability of monthly payments on mortgage loans.

In addition, 46% of the surveyed people stated that for them this argument is an obstacle to home buying, they are concerned about the rising cost of living including utility bills and energy.

The first-time buyers bought their property in the UK, by contrast, feel more confident in the market. Still, the main obstacle for these buyers is too big downpayment. But the number of people who have changed the mood about the prospects about solutions to their housing problems has increased significantly. It was largely thanks to explanatory work carried out by the UK government around “Help to buy”. Under this program, the buyer is required to pay only 5 % of the value of the property, 20% provided by the government on the terms of an interest-free loan and 75% mortgage Bank.

Consumers very sensitive to higher interest rates. According to Paul Broadhead, head of mortgage policy at the BSA (Building Societies Association) – Construction Association of great Britain, the Bank of England is unlikely to increase interest rates in the next 12 months, if the pace of economic recovery will not see significant growth.

However, the market mortgage products are pretty a lot of sentences with a fixed interest rate, which already provides user comfort and independence against further actions of the Bank of England.

In addition, mortgage rates are now much lower than they were 20 or 30 years ago. What is also great news, because today the typical borrower mortgage spends only 17% of your family’s income for the payment of the mortgage loan and 20 years ago it was an amount of approximately 27%.

Thus, thanks to the efforts of the UK government, today’s buyer of property in the UK feels much more comfortable.

® Helen G. Antre 17.12.2013