With interest rates having risen a further 0.25% today – the fifth interest
rate rise since November, Michael Fabricant says: "People who have recently
bought expensive homes in the Lichfield and Burntwood area as well in other
parts of the midlands when interest rates were lower will begin to feel the
pinch as interest rates rise inexorably. My fear is that unless home-owners
have some spare cash available, house buyers may not be able to keep up
mortgage payments. If too many homes come on to the market, house prices
will fall causing negative equity: that is, the value of the home falling
lower than the value of the mortgage taken out to buy it. And that means
that even taking the extreme step of selling the home, still results in
money being owed to the building society.
"Much of this is due to Gordon Brown who has spent more than he has
collected in tax forcing the Bank of England to raise interest rates. And
his budget black hole is looming larger. In the meantime, I would advise
anyone with fears as to how to manage their debts to speak with specialist
advisors at the Citizens Advice Bureau", adds Michael.