Demand for five-year fixed-rates ‘rises’

Demand has increased for fixed-rate mortgages lasting five years for the third month in a row, according to figures newly released by Abbey. Read more

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New buyers will feel pinch

First time buyers will be adversely affected by recent interest rate rises, says the Royal Institution of Chartered Surveyors (Rics).

The organisation believes that people taking their first step onto the property ladder are likely to fall behind with mortgage repayments as a result of the rise.

Conversely, Rics points out that buy-to-let investors are less likely to suffer the same fate, with age being cited as one of the key factors.

Figures show that those with a buy-to-let mortgage are generally older and have more disposable income, making them more secure in the market.

Rics says that 0.96 per cent of all mortgages in the UK are in arrears, with only a tiny percentage of these being buy-to-let properties.

“Buy-to-let investors will be less at risk from repossessions in the coming months,” said David Stubbs from Rics.

“Older, wiser investors are likely to ride out periods of interest rate rises looking to the benefits of long term capital growth rather than short term rental income.

“January’s surprise interest rate rise is likely to soften new buyer enquiries in the coming months but those buyers who have already taken the housing market plunge could find mortgage companies knocking at their doors in the near future as affordability conditions bite.”

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