Market analysts are now predicting that even if the Bank of England base rate is not increased in 2010 many lenders are likely to increase their rates. Some analysts such as Stephen Noakes, Lloyds Banking Group, are looking at the market consensus on bank base rates, the view was “Bank of England will first raise interest rates in the middle of the year and that base rates will end up at 1.5% by the end of 2010”
So either way it would seem that all those with variable or tracker mortgages will see increases before the end of 2010.
One of the issues for lenders is that they are currently making losses by lending on low rates when their true cost of borrowing is much higher. This is a situation that cannot last.
For those with buy to let tracker mortgages at rates of 3% to 4% over BBR this could see them paying as much as 6% by the end of 2010 with further increases in 2011.
It looks like 2010 is going to be an interesting year for the property market!
