Yields and Swap Rates changing
In the last decade house prices have
trebled however rising yields in global bond firms may decide
Over time property prices have withstand four interest rate increments
simply because of the popularity of fixed-rate deals which have
allowed most borrowers to keep their payments stable.
A benchmark via fixed-rate mortgages – two-year swap rates
have increased to 175 basis points during the past 18 months,
leaving many lenders to offer fixed-rate loans at a staggering
6 per cent.
The Council of Mortgage
Lenders feel that more than two million
fixed-rate loans will end over the next 2 years, with most people
facing mortgage rate increases of between 75 and 150 basis points.
Buckley concluded that borrowers would face an average increase
of 1,500 pounds each year via their mortgage bills.
The Royal Institute of Chartered Surveyors indicated that nearly
5 per cent of buy-to-let investors ‘gave up’ during
the first quarter of 2007, this figure highest in two years.
"A large number of people will be remortgaging in a rising interest
rate environment," commented a spokesman at the CML. "We expect
this will contribute to a slowing housing market."
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