/ Author: SPF

The Bank of England’s decision to raise interest rates by a quarter point was widely expected, and though it may worry those with, or looking to get a mortgage, Jez Robin from SPF explains there is no cause for alarm. “There is a whole generation of borrowers who haven’t experienced a rate rise so even such a small increase may concern them. However, the market forecasts the average position for base rate over the next five years to be at just 1%, so borrowers really do not need to panic, as any rate rises are likely to be slow and moderate.”

Jez also believes that few current lenders will see any impact. “The fact is that the majority of mortgages are now fixed rate so there is unlikely to be an immediate impact anyway. And the really good news is that the ultra-competitiveness of the market means that even when their fixed terms are over, borrowers will be able to find rates that are just as good, if not even better.”

Even since the announcement new lower rates have been introduced into Guernsey. Lloyds have lowered rates on the majority of their products and SPF through their new arrangement with Barclays are offering a 2 year fixed rate at just 1.99% with a loan to value of 90% and a 2 year fixed rate mortgage at only 1.39% for an 80% loan to value facility.

It therefore seems that the Bank of England interest rates rise to 0.5 per cent should create barely a ripple in the local housing market.