Third of property owners fear impact of interest rate rise

By Natasha Adamson

A new study has revealed that a third of property owners in Northern Ireland and the rest of the UK believe that an interest rate increase would push them into financial difficulties.

The study by the HomeOwners Alliance and Myhomemove found that 34 per cent of home owners fear an interest rate rise, with some saying they would have to sell their home and move into rented accommodation. There appears to be greater anxiety among younger mortgage borrowers, with 49 per cent of 25- to 34-year-olds saying an interest rate rise would push them into financial difficulties, compared to 24 per cent of over 55s. Older home owners are more likely to have savings, and so many would actually welcome a rate increase in order to see more return on their money.

It is widely expected that there will be no interest rate rise in 2014 despite the UK economy growing at a faster than expected rate.

The results of the study perhaps reinforce the need for the new 'lifestyle quiz' added to the mortgage application process last month, which adds a stress test element to the ability of a mortgage applicant to meet their mortgage payments. It will now be considered whether mortgage applicants could afford the product they are applying for if interest rates were to increase, or their income or outgoings were to change.

If you are buying, selling or remortgaging a property in Northern Ireland and require a conveyancing solicitor to handle the legal process for you contact Wilson Nesbitt in Belfast by calling 0800 840 9290.