In response to comments made today (Aug 6) by the Governor of the Bank of England and publication of the Inflation Report, Eddie Goldsmith Chairman of the Conveyancing Association said:
“There is still a concern that home-owners across the UK have grown dangerously accustomed to low interest rates, and any sudden rate rise compounded with the tougher mortgage rules and continuing economic uncertainty abroad, could have a serious impact.
“I welcome the fact that the Monetary Policy Committee, by an overwhelming majority, has recognised this potential danger of raising interest rates too quickly. While rates are to go up, I’m pleased that the Bank is opting for an increasingly cautious approach which will see rates rise more slowly and over a longer period of time. It’s absolutely the right approach, despite rising wages, holding the key rate for the time being will ensure that the housing market remains on an even keel.
“We must also be mindful that a rise in interest rates, whenever it comes, will inevitably hit first-time buyers the hardest. In a world of higher rates they are going to have to lean even more on their parents to help them raise enough money to put down a deposit. This is going to be especially problematic for those situated in London and the South East.”