House Prices for UK Contractors
The fear, for UK Contractors of falling house prices, once interest rates go up, has subsided somewhat for UK Contractors.
It’s OK securing a fixed low-interest mortgage, while you can still afford it, before interest rates go up, but there is the fear, for contractors, that they may be buying at the peak of the boom.
After all, if there are fewer people able to afford to buy houses, because they are now more expensive to buy, then the economic laws of Supply and Demand kick in.
Interest Rates to Stay Low Longer
However, there are two mean reasons for believing that their fear is misplaced.
Firstly, statements from the Bank of England are now suggesting that interest rates will stay low for a lot longer than originally believed.
Indeed, the Bank had been saying that they expected to be looking closely at interest rate rises by the end of this year or in the first quarter of next year.
Now they are saying that interest rates are likely to stay on hold for much longer – maybe another 18 months.
This is because there has been a drag on the UK economy from problems in China and the Euro area.
Contractor Mortgages Safer
By now, the economist were expecting the UK economy to be roaring along with inflation starting to bite.
However, the UK is predicted this year to have non-inflationary growth of around 2.6% and 2.5% next year.
Inflation has virtually disappeared.
It could be some time before we get inflation in the economy to a degree that causes the Bank to increase interest rates.
House Prices to Rise
Also, a report out this week predicts that house prices in the UK will rise by an average of 20% over the next five years – and that would be even with expected interest rate rises.
Here’s the table of expected average house price rises by region of the UK.
21.6% – South East
21% – East
20% – SouthWest
17% – East Midlands
16.5% – West Midlands
15.3% – London
14.8% – Wales
14.2% – Scotland
14.2% – Yorkshire and Humber
12.7% – North West
12% – North East
It looks like even London, were house prices are already high, they will continue to rise in a non-inflationary environment.
If inflation stays low, as it seems to be doing at the moment, these could be real rises in house prices rather than just inflationary rises.
This has a knock on effect for specialist Contractor Mortgages
Specialist Contractor Mortgage Brokers
Specialist Contractor Mortgage Brokers can get contractors mortgages without having to produce three years’ worth of accounts or based on Director’s salary as would happen if contractors walked into a high street bank or building society.
They can get mortgages for contractors based on their daily rated annualised (based on 48 weeks a year) and on just the production of their contracts.
For more info, or to apply, just click on Contractor Mortgage Application and fill in the form there.