Cheap repayments will not last
A Staffordshire estate agency is reminding homeowners enjoying the benefits of much lower mortgage repayments to remain cautious about their spending as interest rates can go up at any time.
Heywoods, based in Newcastle-under-Lyme, made the call after research by property information website Zoopla.co.uk revealed that Stoke-on-Trent was the third-most affordable area in the UK and that general housing affordability was at its highest for seven years.
But after a year in which the Bank of England base rate has remained at a record low of 0.5%, Heywoods is concerned that many homeowners have become accustomed to rock-bottom interest rates and are spending the extra cash instead of using it to reduce their financial commitments, credit cards and debts.
Heywoods said that in an area such as the Potteries it was great to see homeowners with extra cash in their pockets. Nevertheless, it warned, many borrowers could be in for a shock if interest rates were to move up suddenly, increasing their risk of getting into financial difficulty.
The company, which also runs a mortgage advice bureau, said that it put affordability at the centre of any mortgage advice it gave. And that meant being prepared for more challenging times ahead at a time when the going was good.