Well it's more good news for homeowners as Nationwide Building Society state that house prices rose by 0.5% in September. That's an annual rise of 3.8% compared to this time last year. I have no reason to doubt these figures but looking at the local market in Bournemouth and Poole, it certainly feels that the rise in prices has been considerably more than this.
The biggest problem still seems to be the lack of property available. I have lost count of the number of chains that are not yet complete as someone in the distance cannot find what they are looking for. This is a major cause of frustration for everyone. Even the traditional upturn in activity levels for September does not seem to have helped this issue.
So how about interest rates?
It still looks very probable that they will go up in early 2016 from the Bank of England's low rate of 0.5%.
One of our prominent sources of predictions, IHS Global Insight, think that the first rise will be in February 2016. However, this will depend on earnings growth and if this picks up in the coming months.
So it could be wise to tighten the belts for Christmas as you do not want to be paying off credit card bills and facing higher mortgage payments!
Beyond the first rise, what happens after that?
IHS have put their necks on the line with the additional predictions for the Bank of England Base Rate:
1.25% by the end of 2016 - a rise of 0.75% from now
2.0% by the end of 2017 - a rise of 1.5% from now
2.50% by the end of 2018 - a rise of 2% from now
So it is still a really good time to look at fixing your mortgage payments so that you lock in your payments and do not feel the pain of increased outgoings for a while.
Rates have remained low and with a 25% deposit/ equity, you would see rates fixed at 1.75% for 2 years and 2.35% for 5 years. These really are too good to miss so if you are on a variable rate, it would be sensible to look at your options now.
If you would like to discuss your mortgage, please do not hesitate to call 0844 736 1920 for a chat.
YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE