We’re only eight months into the year, but it already feels that 2018 will be remembered for extreme weather. Earlier in the year we had to deal with the ‘Beast from the East’, which brought exceptionally wintry weather to much of the UK. Since the start of the summer we’ve enjoyed a long heatwave with record-breaking temperatures across Europe and the lack of rain across the UK has left our parks and gardens are parched.
Thankfully it hasn’t been quite so dramatic for the property market, which has performed largely as predicted. Indeed, earlier this month the Monetary Policy Committee voted to raise interest rates – a decision that was widely expected. The quarter of one percent rise was only the second rise in a decade and means interest rates remain significantly lower than they were shortly before the UK entered recession a decade ago. The Governor of the Bank of England has stated the days of high interest rates are over and has predicted the cost of borrowing is unlikely to rise above 3% for decades.
This may not be welcome news for savers. Even those with a modest £10,000 investment in a savings account could see their investment grow by little more than £150 a year – and that’s provided financial institutions even pass on the rate rise.
Meanwhile a landlord who has a tracker or variable rate mortgage may see their monthly payments rise as the majority of lenders will pass the rate rises on to customers. However, an increase of just one quarter of one percent is expected to see the impact limited to tens of pounds a month – indeed, a £200,000 mortgage may increase by around £40 a month.
Even though this a relatively small increase, if you do feel you could be impacted by the rate rise, then speak to your local branch. We can put you in touch with one of our mortgage advisors from Just Mortgages. They could assess your current arrangements and suggest a change that could help you to reduce your monthly repayments.