Vladim Toader, CEO and co-founder of neolender Proportunity, comments on the impact of the Bank of England’s 1 per cent hike in interest rates on first-time buyers.
Today’s interest rates hike announcement from the Bank of England is a further blow to first-time buyers trying to get onto the housing ladder. Many who have been saving for years are now facing further delays to being able to afford to move, as more mortgages will be out of their borrowing reach.
We’ve already seen mortgage lenders removing cheaper rates in anticipation of the rise, despite house prices increasing at the fastest rate in 17 years. Novice buyers need to prepare themselves that interest rates will likely go higher.
As a result, they may need to increase their deposit and explore other lending options, to lower their loan to value and access better rates.
Meanwhile, the current supply crisis means house prices will more than likely continue to go up – albeit at a slower pace than we have seen – and inflation is rising, with petrol prices and energy costs going up.