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A leading business organisation has warned that rises in interest rates are on the way this year.
The British Chambers of Commerce (BCC) predicts that the Bank of England will move to raise rates in August, in an effort to curb inflation. And that’s despite revised economic forecasts, with the BCC becoming the latest in a long line of organisations to downgrade estimates for UK growth in 2011 and 2012.
Figures from the banks present a subdued but steady picture of today’s mortgage market.
According to the BBA (British Bankers’ Association), there was some growth, with net mortgage lending – taking into account repayments – increasing by 2.2% in the year to April.
A prestigious international body has said that UK interest rates should rise soon.
The Organisation for Economic Cooperation and Development (OECD) has urged the Bank of England to follow the example of the European Central Bank, and act to raise rates by the end of the year. Economists fear that inflation may become entrenched, as workers demand higher wages to cope with rising prices.
Forget the Bank of England and its record low base rate – the rates we pay on personal loans are at their highest for a decade.
That’s among findings from new research by Moneyfacts. They calculate that the typical rate on a £5,000 loan is now 12.7% – the highest seen since May 2000.
Home improvements are in the air – though too late for troubled DIY chain Focus Do It All. Rivals Wickes, more at the no-frills end of the market and catering for the building trade too, are taking over a clutch of stores.
Now’s the time of the year when the thoughts of householders traditionally turn to extensions and refurbishments. But current difficulties in the housing market are giving added impetus to the plans of many of us.
Mortgage borrowers could benefit from low interest rates for some time to come.
That seems to be the message of a number of developments this week – despite a surprise leap in inflation to 4.5% in April. Most recently, minutes of the MPC – the Bank of England committee responsible for setting the Bank’s base rate – show that members were again divided 6-3 on whether to raise interest rates.
A body representing lenders has given a sober assessment of today’s mortgage market in a briefing to housing minister Grant Shapps.
The Council of Mortgage Lenders (CML) was focusing on the problems of first time buyers in particular. But the organisation argues that this issue simply reflects conditions in the market as a whole.
Inflation has risen sharply, and that is bound to cause renewed speculation about a rise in interest rates.
The Consumer Prices Index rose to 4.5% in April – more than double the government target – having dropped back to 4% in March. The high price of energy and of imported commodities such as foodstuffs helped fuel the increase.
Lower mortgage payments are a lifeline for many as consumers face higher household bills.
That’s the implication of a number of recent surveys, with latest research from Halifax suggesting that mortgage payments have fallen by a fifth since 2008. While mortgage borrowers have seen their annual payment drop by £956 on average, a host of other bills have risen.
The first three months of 2011 saw something of a remortgaging revival, according to figures from the Council of Mortgage Lenders (CML).
Remortgaging accounted for 37% of all lending, up from 30% in the last quarter of 2010. March saw a significant boost for both remortgaging and lending for house purchase – with 33,900 and 37,800 new loans respectively.
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