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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.

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