Mortgage Information

Mortgage Types


Rate increase predicted by Nationwide

1/05/2007

Due to house inflation in recent months, the interest rate is likely to increase and also they may be a crash in the property market.

Nationwide has evaluated that house prices have risen by £3,200 in the last 4 weeks.

Chief economist, Fionnuala Earley at Nationwide said: “The pace of house price growth almost doubled during April to 0.9%, up from 0.5% in March. “This brings the annual rate of inflation back into double digits at 10.2% and the price of a typical house up to £180,314, which is £16,741 higher than at this time last year.”

British Bankers Association (BBA) show that mortgage demand could step down due to rise of interest rates. In March 2007 the mortgage approval figures were down by 8% compared with March 2006.

BBA’s director, David Dooks, said: “In the last two months net lending has risen less sharply and, compared to the same time last year, the number of mortgages approved in March was lower, indicating that weaker demand is starting to emerge.”

Ms Earley commented: “With the market already showing signs of cooling, too sharp a rate hike could undermine market confidence and dry demand up swiftly. But on top of this, they could also lead to widespread payment difficulties which, in an illiquid market, could precipitate price falls.”