Loans Mortgages Credit Cards Interest Rate Rises Around The Corner

Loans Mortgages Credit Cards Interest Rate Rises Around The Corner

Loans .​
Mortgages .​
Credit Cards .​
Interest Rate Rises Around the​ Corner.
Financial traders in​ the​ City are expecting interest rates to​ rise by half a​ percent by the​ end of​ this year .​
These days the​ Bank of​ England prefers to​ make a​ series of​ small changes to​ interest rates rather than one large change,​ so watch out for the​ first 0.25% rise around August time
Mortgage rates are already reacting with the​ rates for fixed rate mortgages rising .​
The best rates for two year fixes are now in​ the​ 4.15% to​ 4.48% range and for three year fixes,​ 4.49% to​ 4.64% .​
The rates on​ credit cards and loans are usually variable,​ so these aren't likely to​ rise until the​ Bank of​ England moves – but you​ can bet your bottom dollar that when the​ time comes,​ they'll move quickly.
Only a​ month ago economists were talking about further falls in​ interest rates,​ so why has everything changes?
It's all because inflation is​ coming back under pressure .​
The governments' target for inflation is​ 2% per annum but with energy prices high,​ and likely to​ soar even further,​ we are beginning to​ see the​ knock on​ effect of​ energy inflation across the​ economy .​
And despite fuel bills siphoning money from drivers,​ new car registrations are up 7% on​ the​ year to​ March,​ industrial orders rose more than 13% and business confidence improved again in​ April .​
Even America,​ the​ world's largest consumer of​ oil,​ the​ economy is​ experiencing surprising levels of​ activity.
In many ways this is​ good news for Britain's economy .​
The annual rate of​ exports is​ growing at​ the​ rate of​ almost 20%,​ a​ rate virtually matched by imports .​
And the​ major quarterly survey of​ the​ economy suggests that growth will remain strong.
For the​ man and woman in​ the​ street,​ economic figures are all well and good,​ but it's the​ housing market that is​ perhaps their key barometer .​
Here the​ current news is​ good for existing homeowners,​ but perhaps less good for those trying to​ get a​ foot on​ the​ housing ladder.
Currently,​ the​ housing market is​ buoyant .​
In the​ first three months of​ this year the​ Halifax reported house prices up by 1.6% and the​ Nationwide reported prices up 2.3% .​
But these are averages .​
Increases vary widely depending on​ where you​ live .​
The average asking prices reported by Rightmove,​ the​ web site for estate agents,​ were up 2.7% January to​ February 2018,​ 0.9% from February to​ March and 1.1% March to​ April to​ set record high of​ £205,​674 .​
Overall the​ market rises are being led by `mini-boom' at​ the​ upper end.
The problem is​ that traditionally,​ sentiment in​ the​ housing market is​ fickle .​
When we get the​ first confirmed sign of​ a​ rise in​ interest rates,​ watch buyers dive for cover .​
We believe that a​ quarter percent rise in​ August followed by another quarter in​ early autumn,​ will cause the​ housing market to​ stall.
As we all know,​ forecasts circulating eighteen months ago that the​ housing market was in​ for a​ crash landing,​ proved wrong – and we're still not expecting prices to​ fall heavily .​
But it's the​ property hot spots that'll bear the​ brunt of​ any slow down .​
They'll be the​ first to​ really feel the​ slow down and plus a​ dose of​ realism in​ respect of​ asking prices.
At the​ moment nationally,​ the​ average house sale achieves around 95% of​ its asking price .​
When the​ forecast interest rate rises emerge,​ we'd expect to​ see this percentage fall to​ just under 90% .​
This will undoubtedly put pressure on​ sellers to​ trim their asking prices.

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