Last week’s long-awaited 0.25% rise in interest rates is unlikely to impact heavily on the housing market, according to the Financial Services Director of Douglas Allen's mortgage arm.
“Being the first rise after 10 years of the lowest rates since records began, it obviously generated a lot of attention in the media,” acknowledges Keith Lovell, of Rochester-based Mortgage Matters Direct. “However, the market has been anticipating a small rise of this kind for a long time, and consequently many lenders had already factored it into their calculations.”
In any case, he adds, any impact on the market will be further mitigated by the high proportion of homeowners now on fixed rate mortgages. “The proportion of outstanding mortgages on variable rates - and which are therefore likely to see an increase in payments as a result of any base rate rise – is now at a record low, and looks likely to decline still further.”
In line with many industry observers, Keith expects to see further rises in the medium term, but adds that they should be similarly small.