The Bank of England raises interest rates
For only the second time in the past 10 years, the Bank of England has raised interest rates.
The rate has risen from 0.5% to 0.75% above the Bank of England base rate, its highest point since early 2009.
What does this mean?
The decision will mean that around 3.5 million people with variable rate or tracker mortgages will end up paying more. Generally, an interest rate rise is bad for borrowers but good for savers, although it’s never that simple. Banks are much slower to raise saving rates whilst rate rises on mortgages come into effect immediately.
The average balance outstanding is £112,000, for those with more left to pay, the rise in mortgage payments will be more.
According to Nationwide Building Society, the following table shows the impact of a base rate on a variable rate mortgage:
| Mortgage balance |
Current monthly payment |
Annual increase |
| £75,000 |
£408 |
£112 |
| £100,000 |
£545 |
£150 |
| £125,000 |
£681 |
£187 |
| £150,000 |
£817 |
£224 |
| £175,000 |
£953 |
£262 |
| £200,000 |
£1089 |
£299 |
| £225,000 |
£1253 |
£337 |
| £250,000 |
£1393 |
£374 |
The Bank of England is saying that interests will increase further but at a gradual rate. City forecasters predict that this will mean one or possibly two increases of 0.25% by 2020. Most feel that the new normal base rate will end up somewhere between 2% to 3%.
Are you struggling to keep up with your mortgage payments?
Rises in spending, with the average household spending more than they earn, means that finances are under extreme pressure. Many people are having to increase their debt or dip into their savings.
The interest rate rise is likely to have some impact on the property market. With the uncertainty surrounding Brexit, increases in Stamp Duty Land Tax and the higher rates of tax facing buy-to-let investors, many people are making the decision to dispose of their portfolios lest they end up paying more in tax than they are earning.
Can Sharpes Auctions help me?
Sharpes Property Auctions continues to assist property owners and investors across the country to sell their properties and land, both commercial and residential.
You can be assured of a swift sale when you market your property with us, with many completions taking less than 28 days and some even selling before they reach the auction room.
We market your property extensively, online via our website at
www.sharpesauctions.co.uk as well through Rightmove, Zoopla, Facebook and Twitter. We also have a high quality, full colour catalogue which features our auction lots and a large database of investors that we regularly keep updated with upcoming properties for sale. Our no sale no fee policy coupled with our zero entry frees means that you have nothing to lose by instructing Sharpes to sell your land or property, whether its terraced through to a detached, a bungalow or a flat, or a shop or mill premises.
Call us now for your free, no obligation property appraisal on 01274 731217 (Bradford office) or 0161 302 9782 (Bury office).
