Recent Interest Rate Rises

The 5 interest rate rises that have incurred in the last 15 months, have now taken effect on the amount of new mortgages approved in the UK in that time. Down by 9000 in November 2004 from 8500 in the month of October, it is being said that these rises have gone a long way, in helping the British public to take a look at the debt that they can now digest.

As house prices start on a downward turn, it has been suggested that the Bank of England will have to reduce interest rates or at the very least put a block on them, from going any higher in the coming months.

This is also having a knock on effect on the length of time that a vendor is taking to sell their property, as rises start to bite.

It has been suggested that a rise in the market in the second the second half of the year, will turn a 3% rise in the next 12 months. This is on the back of a drop of 32% in the amount of properties sold in the last 6 months and the dip in house prices in the 3 months up to November; this will be of some relief to homeowners.

The only part of the country to buck the trend has been in Scotland, though property sales figures have slowed considerably, price rises are still on the up. Latest figures from myhouseprice.com that house prices rose by 16% the same as in the previous year to November, though a slowing of prices are expected in the latter part of 2005.

The amount of unsecured loans is usually a good gauge on the way that house prices are going, so with the growth slowing in loans and credit cards to GBP1.3 billion in November, down from GBP1.51 billion the month before, was the lowest since April and lower than the figure of GBP1.6 billion expected, so house prices are predicted for a further cool down.