Most property owners could cope with interest rate rise

By Natasha Adamson

The Bank of England considers that most mortgage borrowers would be able to cope with an interest rate increase, but their projections are dependent on a 10 per cent rise in household incomes.

The annual survey of household finances by the Bank of England looked at the potential impact of interest rates increasing from 0.5 to 2.5 per cent. It concluded that 4 per cent of mortgage borrowers would struggle to meet their monthly mortgage payments, but that is assuming that incomes increase by 10 per cent. If household incomes were to remain the same, 41 per cent of mortgage borrowers would face difficulties if interest rates went up by 2 per cent.

While the survey looked at interest rates rising to 2.5 per cent, the Bank of England has on numerous occasions reassured that increases to interest rates would be gradual. Speculation as to when the first increase will occur has changed in the past months, from those who suggested a lift before the end of 2014, to the majority who now consider that rates will remain unchanged into the second quarter of next year.

If you are buying, selling or remortgaging a property in Northern Ireland, and want to speak to a conveyancing solicitor, contact Wilson Nesbitt in Belfast or Bangor by calling 0800 840 9290.

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