Will this inflate the housing prices? Very likely. Sellers will be a bit more eager to put their properties on the market and look forward to getting potential buyers rather quickly.
On the other hand, buyers will have to be wiser and plan things carefully. An increase in base rates will have a massive impact but would not necessarily decimate the market. I think buyers should just be more careful about the mortgage deals they are getting to make sure that they are not badly hurt by the base rate increase.
For instance, they can still shop around for fixed rate mortgages to help them with their property purchase. And even if the property prices soar as expected, quite a number of decent mortgage deals may ease their worries. Fixed Rate mortgages are going to be ideal. For instance, a mortgage provider can set a fixed interest at 2% for the first few years – be it 3, 5, or 10. Even if there are changes in the BoE’s base rate, they’re still very likely to pay the same rate for a period of time. Only at the end of the fixed rate period will they be shifted into the standard rates that the have agreed with their mortgage lender.
Will it really take the UK Housing Market down the drain? I believe and certainly hope not. Property ownership, irrespective of how daunting and huge a commitment it is, will always be something the people would want to achieve. Shelter is a necessity, and even if the prices soar due to an increase in base rates, there will be (and I hope there should be) schemes to help consumers afford the best property for them and their families.
Click to Read The Full Story and Add your Own Comments to Would an increase in UK base rates decimate the UK property market?
