Shelter warns of impending housing crisis
The housing charity Shelter has today warned that up to 5 million homeowners in the UK can ill afford the additional mortgage cost if UK base rates were to rise. This is a terrifying situation for the UK housing market and is one which the UK government is certain to take notice of. Even though the Bank of England has already suggested that base rates will remain at 0.5% for some time to come, there is concern that inflation could return with a vengeance in the short to medium term.
More and more people in the UK are simply getting by on a day-to-day basis and are not able to look forward to the future. As a consequence, very few homeowners in the UK have money set aside in the event that mortgage rates rise in the short to medium term. If UK base rates were to rise in the short to medium term it is highly likely we would see an increase in the number of repossessions and pressure on the property market.
The property market is the engine room of the UK economy and if property prices do come under pressure it is unlikely the UK economy would race ahead in the short to medium term.
Share this..
Related stories
First Time Buyers Will Struggle For Finance Before 2010
A report into the UK mortgage sector by Sir James Crosby has raised a number of worrying points with the main one being in relation to first time buyers. Sir Crosby believes that the restriction of finance in the mortgage market will remain until around 2010 and he suggests that first time buyers with deposits of less that 25% will be hit hardest.
While there are growing calls fo...
London home 'biggest-ever' repossession
An £11 million home in West London has become the UK's biggest-ever home repossession.City financier Robert Bonnier bought the home last year, near the top of the property market.British house prices have dropped by over ten per cent since, however - with high-end London property still more badly affected.Mr Bonnier, 38, worsened his exposure by taking out loans to put in a series of costly impro...
Read MoreDunfermline Building Society mortgage holders lose out
It has been confirmed that despite the Nationwide Building Society taking over the Dunfermline Building Society, Dunfermline customers will remain on their old standard variable rate of 5.19%. This is despite the fact that the Nationwide standard variable mortgage rate is just 2.5%, with a guarantee that it will never rise above two percentage points over base rates.
The Dunfermline...
Nationwide announces reduction in mortgage rates
While the headlines would appear to be excellent news for homebuyers in the UK, the announcement that Nationwide will as of tomorrow reduce mortgage rates by up to 0.5% is perhaps not as relevant as you may think. While there is no doubt that rates will fall tomorrow, with a four year fixed mortgage rate set to come in at 5.08% against 5.58% today, there are certain criteria which need to be adher...
Read MoreWhy are UK banks so risk averse at the moment?
As we see signs that the UK mortgage market is improving, albeit at a very slow rate, there are concerns about the future trend of mortgage liquidity. On one hand we have the UK government pushing the UK banking sector to increase mortgage liquidity while on the other hand we have them being penalised if they take too many risks. The UK government has effectively caught the UK banking sector in a...
Read More