Mortgage rates could increase as market expands

RICS (the Royal Institution of Chartered Surveyors) has said that mortgage rates could rise this year as the market expands, according to The Times.

Simon Rubinsohn, Chief Economist at RICS, said: “The market will push up interest rates this year even if the Bank of England does not. The markets view Labour as a bit more of a risk than the Conservatives in managing the deficit.”

Economists have said that mortgage rates are likely to rise even if the Bank of England does not raise its base rate from the all-time low of 0.5%. And according to the Council of Mortgage Lenders (CML), about two thirds of mortgages (6.5 million) are linked to the base rate.

Meanwhile, the UK’s two largest mortgage lenders, Lloyds Banking Group and Santander, have indicated that a wider range of mortgage deals for up to 90% of a property’s value will become available this year.

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