Gary Latham, Managing Director – UK Property Finance Ltd
British borrowers interested in securing capital for largely any purpose whatsoever are being warned that procrastination could prove increasingly costly. From first time buyers to movers to buy-to- let investors, the cost of secured borrowing has never been lower. But as far as leading economists and experts are concerned, this isn’t something that is going to continue. In fact, evidence is already beginning to creep into the equation of a slow but steady climb back to higher interest rates, as historic lows gradually fade away.
Nevertheless, there is still plenty of time to secure the kinds of interest rates that may not present themselves again for the foreseeable future at least. One of the only positive effects of the recent economic downturn has been an unprecedented period of the lowest interest rates in history, with everything from personal bridging loans to mortgages to secured business loans being handed out for next to nothing. Nevertheless, as the economy slowly but surely begins to cloy its way back to some semblance of stability, such interest rates cannot and will not hold out. Not only have several leading lenders and banks already begun rolling out gradual increases in interest rates, but a growing number of institutions have confirmed their intention to do exactly the same over the coming months.
Taking a look at the bigger picture long-term, leading economists do not see interest rates getting back to their previous level until the early stages of the 2020s at least. Nevertheless, the prediction for each and every year in the meantime is one of gradual increases – all of which will affect borrowing costs for business and domestic borrowers alike. One of the UK’s most experienced and innovative brokers, UK Property Finance, has stated outright that for anyone looking to take out a new secured loan product or enter into a refinance deal of any kind, it is unlikely that any better deals will present themselves than those that are available right now.
It was back in June 2016 that mortgage rates in the United Kingdom hit their lowest ever levels – specific deals coming out with interest rates of just 0.99% at HSBC. This applied only to those able to deposit at least 35% and was offered in accordance with strict terms and conditions, but nonetheless represented a historic low for the lender. Likewise, the Yorkshire Building Society went even further with an unprecedented 0.98% interest rate on one of its own products, providing qualifying borrowers with the opportunity to secure much-needed finance for almost nothing in return.
Unfortunately, these deals are fading fast and historically low mortgage interest rates are being withdrawn from the market all the time. The same also goes for the interest rates applicable to various other financial products and solutions – particularly those applicable to property purchase, development, renovation and so on. A variety of intelligent financial solutions including bridging loans can still be accessed at some of the most attractive rates seen in decades, but time is running out for borrowers at all levels chasing the very best value deals.
Once again, any further procrastination may prove to be extremely costly going forwards.