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UK Interest Rates Forecasts and Predictions for Home and Property in the UK

Checkout this weeks latest interest rate forecast here

 

Interest Rate Update 1 January 2012

UK Interest Rate: 0.5%

UK Interest Rates Forecast: Mortgage rates may rise if Eurozone crisis escalates

Lenders Continue To Chisel Away Rates

Throughout much of 2011, mortgage lenders gradually made small cuts to their fixed and tracker mortgage rates in an attempt to become more competitive and attract the best buyers.

The good news is that so far in 2012, that trend is continuing, with a number of lenders announcing small cuts to some of their most popular deals – such as five-year fixed rate mortgages – in the closing days of 2011.

On the other hand, many economists believe that there is a real risk that mortgage rates will rise in 2012, despite the near-certainty that the Bank Rate will not rise. Wholesale money markets across Europe, on which UK mortgage lenders rely for a portion of their funding, are struggling to operate normally as the Eurozone crisis continues – and they could dry up completely again, as they did in the early days of the credit crunch.

64% Of First-Time Buyers Choose Brokers

Mortgage intermediaries – usually referred to as mortgage brokers – arranged 64% of first-time buyer mortgages and 52% of home mover mortgage deals in the third quarter of 2011.

These figures, which were collated by the Council of Mortgage Lenders, show that the majority of home buyers do not go direct to mortgage lenders when arranging a mortgage for their home, instead preferring to use a broker with access to mortgages from a number of different lenders.

Members of the Intermediary Mortgage Lenders Association expect gross mortgage lending to fall slightly from 2011 levels in 2012. Over the longer term, they expect the Bank of England Bank Rate to rise from its current level of 0.5% to 2.83% by 2016, by which time they believe house prices will also have started to rise again.

 

 

 


 

 

 

 



 

 

 





 

 


 



 


 


 





 


 



 



 

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Please note, this information is NOT necessarily RELEVANT in Scotland


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