3rd November 2015
Rise of fixed rate mortgages good news for many says building society financial chief
The Nationwide Building Society’s chief economist says the rise in popularity of fixed rate mortgages should insulate many homeowners from any rise in interest rates next year.
Looking to 2016, Robert Gardner, said the proportion of outstanding mortgages on variable interest rates has declined steadily, from almost 70% in mid-2012 to around 50% in 2015.
He commented: “This should help to insulate many households from the impact of higher interest rates.
Mr Gardner added: “The housing market should be able to cope with higher interest rates in the year ahead, provided the increase is modest and the economy and the labour market remain in good shape.”
The Nationwide’s chief economist was commenting after the society announced that house prices across the UK have risen by an average 0.6% across the UK last month, bringing a typical home’s cost to £196,807. This represents an average increase of 3.9% over the past 12 months.
Average house price in Croydon is 346,231 – up 9% on September 2014 and indicating an average 6% across the year as a whole according to propertychecklists.co.uk
“Over the past five months annual price growth has remained in a fairly narrow range between 3.0 per cent and 4.0 per cent, broadly consistent with earnings growth over the longer term,” said Mr Gardner.
“While this bodes well for a sustainable increase in housing market activity, much will depend on whether building activity can keep pace with increasing demand.”
The Land Registry’s figures for England and Wales showed prices up 5.3 per cent over the past year – with transactions around 10 per cent lower now than in autumn 2014.