Whether we like it or not (or not I think!),
the continuation of record breaking low interest rates will be confined to history
before we know it. It is widely predicted that interest rates will rise over
the next 6 – 12 months……probably in a gradual manner over a 2 – 3 year period.
Perhaps most worryingly is that we know it is
coming but few are taking action to prevent / minimise the negative impact it
will have.
More than 2 million of Britain's 8.4 million
mortgagors will be forced to spend more than a third of their post-tax income
on mortgage repayments if rates rise from 0.5% to 3.0% by 2018……which is
broadly in line with market expectations. (Source: Resolution Foundation)
Bank of England data suggest higher interest
rates could affect consumers more than previous cycles because 65% of mortgages
are now linked directly to the Bank Base Rate…..compared with 38% before the
financial crisis.
Be warned…..an interest rate cloud is coming.
Ignore it at your peril and start to be
creative with covering your position!
Never dull is it!
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