I see Mark’s logic. I worked in mortgage arrears and the rise in mortgage rates always increases the arrears and subsequent repossessions. I’d argue that the long period of low interest rates has resulted in a greed to move up the market into bigger and potentially unaffordable properties. Buyers of property should always consider what will happen if rates rise.
Fixed interest rates can help but those always come to an end often resulting in a big jump in payments. I was lucky enough to have an interest only mortgage that I paid down when investments made came to fruition. Not without risk but I thought well covered.
Landlords, of which I am one, will soon have a remortgage coming up, and we will probably look at a fix, but it will certainly not be at a rate that was enjoyed a few years ago. This may result in a rent rise, although offset by some improvements for our tenants.
I see hard times ahead, but hopefully with blue clouds on the horizon.
Banks have gradually been increasing their provisions for bad debts, that will hopefully see the errors of the nineties not reoccur again