The Housing Minister Grant Shapps has recently called on lenders to offer more long term fixed rate mortgages – up to 30 years. This is very much a continental model and I welcome this input from the Minister. I think that long term fixed rates add a degree of certainty to household finances and reinforce a degree of stability to the property market. The Council of Mortgage Lenders has responded to the Minister by saying it will be keeping the issue of long term fixed rates under review with the CML Director General Paul Smee indicating “The choice of whether or not to fix and for how long involves taking a view about the likely direction of future interest rates along with a personal consideration of how much rate risk is acceptable to a household. Given the economic uncertainty it is not surprising that for the time being many of those who have reverted on to variable rates are choosing to wait before they decide what to do next”.
Markets are currently expecting the bank base rate to rise to 2% by the end of 2014.
There is no doubt that we are in a very uncertain time and I will continue to monitor trends and rates and report back to you.Lindsay Darroch Partner and Head of Property