The Bank of England may have left rates on hold in the last 2 months, but sub-prime issues in the United States could force mortgage rates higher.
(PRWEB) September 11, 2007 -- After a precipitous rise in UK house prices over the past 18 months, there are signs that the market is beginning to cool after interest rates were raised to 5.75% in July 2007, from 4.5% at the beginning of 2006. Although the Bank of England has left rates on hold in the last 2 months, Catch Properties believes that mortgage rates could rise further in the near term.
"The sub-prime issue in the United States has shaken up the global financial industry in the past couple of months," said Christina Araneta, founding partner at Catch Properties. "Fears of a contagion effect and falling inflation rates in the UK mean that the Bank of England is likely to leave rates on hold for now. However, the sub-prime issue has also increased risk aversion meaning that inter-bank lending rates have risen further. This will lead to mortgage lenders raising rates to pass on the higher costs."
The higher interest burden is already starting to show in the form of rising home repossessions. "Home owners whose fixed rate mortgages are coming to an end are suddenly finding themselves having to pay as much as 50% more in monthly interest. We advise home owners to review their financial situation sooner rather than later - taking steps early could be the key to avoiding repossession and irreparable damage to your credit."
About Catch Properties
Catch Properties is one of the leading private homebuyers in the UK and has helped numerous home owners avoid repossession by offering them a quick home sale and guaranteed completion. In a slowing market, this can be a valuable option for would-be vendors.
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