UK Property Owners Should Plan For Interest Rate Rises

 

A representative of the Bank of England has warned UK homeowners to prepare for higher interest rates in the future.

In an interview with The Daily Telegraph, Paul Fisher, the bank’s executive director for markets, stated that rates would need to return to a “normalised” position of around 5.00%.

Mr Fisher, who is also a member of the Bank’s rate-setting Monetary Policy Committee (MPC), also commented that mortgage borrowers needed to develop a different 'mindset', many of whom have stuck with their lenders’ reversion rates over the laast few years, when coming to the conclusion of fixed-rate deals.

Whilst some borrowers are taking advantage of attractive reversion rates, others are restricted in remortgaging as they hold a low level of equity in their property and/or have poor credit histories.

The Confederation of British Industry (CBI) has also forecast that the base rate will begin “rising gently” in the Spring, to hit 2.75% by the end of 2012.

 

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