Half of mortgage borrowers say they would struggle to cope with interest rates rise: Property news roundup
Plus, homeless families stuck in London, and house prices in Scotland
Alex Johnson has been part of The Independent's online team since 2007. He has been writing about microarchitecture on his internationally-acclaimed Shedworking blog since 2006 and is the author of Shedworking: The Alternative Workplace Revolution. His latest book is Bookshelf, published by Thames & Hudson.
Thursday 07 August 2014
Around 46 per cent of people with a mortgage say they would struggle if the interest rate on their home loan went up by three per cent, says a new report.
According to the poll by mortgage broker Ocean Finance nearly one in 10 say they would immediately seek to sell their property and a similar figure say they would be forced to work more hours to afford the additional repayments.
The Bank of England is likely to increase its interest rate to 2.5 per cent by early 2017, Governor Mark Carney suggested in June.
Ian Williams, spokesman for Ocean Finance, said: "Clearly it is likely to take a while for rates to rise by three per cent. But if they do go up by that much over the next couple of years it's worrying to hear that so many mortgage borrowers are concerned about how they would keep up with the repayments, especially when one in 10 are already behind with them."
More than a third of mortgage brokers expect a rise in the Bank of England base rate before the year is out, according to the Intermediary Mortgage Lenders Association.
Peter Williams, Executive Director for IMLA, said: "The prospect of a rise in interest rates has been looming on the horizon for some time, but now it appears an increase is hovering closely overhead. The majority view across the mortgage industry is that a rise in 2015 still looks to be the most likely outcome."
Over a third of homeless families in London stuck in temporary housing for more than two years
Thousands of homeless families in London have been stuck in emergency housing, including B&Bs or hostels, for more than two years, according to Shelter.
Figures gathered by the charity from freedom of information requests found that, of the London boroughs that responded, more than half of homeless families have been living in temporary housing for more than a year, while 41 per cent (more than 4,000 homeless families) have been there for two years or more.
Campbell Robb, Shelter’s chief executive, said: "It's appalling that in one of the wealthiest cities in the world there are forgotten homeless children, hidden from view in temporary accommodation that offers them no stability and that can be unsafe and in poor condition.
"And sadly, with more people struggling to make ends meet, we’re bracing ourselves for an increase in demand from families who desperately need our help."
House price growth in Scotland outperforms England and Wales
Figures from Strutt & Parker for May to June this year show that average house prices were up by 4.2 per cent to £187,500 across England and Wales compared to last year, but that prices in Scotland jumped by eight per cent to £135,000 in the same period.
Stephanie McMahon, Head of Research at Strutt & Parker, said: "Interestingly, Scotland is not showing a slowdown. Normally markets slow down due to uncertainty and on that basis we would have expected Scotland to pick up in the latter half of the year. At the moment it seems to be bucking the trend."
Strutt & Parker is predicting eight per cent growth for residential house prices across the UK in 2014.
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