Fears as interest rates rise again (From The Wiltshire Gazette and Herald)

Fears as interest rates rise again

HOME-OWNERS are to face a second mortgage hike in just three months as interest rates rise again.

The Bank of England's decision to push its rate up by a quarter of a point to four per cent will mean someone with a £100,000 mortgage will now pay about £15 extra a month, from £629 to £644.

And this could just be the tip of the iceberg, with many analysts believing more hikes are on the cards later this year.

Mark Wightman, a partner at Dreweatt Neate auctioneers and estate agents in Old Town, predicted this latest rise back in November.

He said: "The immediate impact on spending will not be massively significant.

"Compared to 1992, when the rate was set at 15 per cent, this is not high.

"It is more the long-term effect that is worrying analysts. This could be the start of an upward trend."

"Interest rates have wavered over the past year, due to changes in business and consumer confidence, as well as rising house prices.

"Last summer interest rates hit a 48-year low of 3.5 per cent as there were fears that the war in Iraq would push the global economy into recession. Once the Bank Of England realised these fears were over exaggerated, it nudged the rates up to 3.75 per cent in November."

Mark added: "This latest rise will cause real concern for first-time buyers and it may mean parents will have to help their children to get their first foot on the property ladder."

Kris Allen, 21, lives in Verwood Close, Park North, with his parents.

He is currently looking for a job and has dreams of buying a home for himself but feels raised interest rates will stop it ever happening.

"It's a disgrace. Two increases in three months is just too much," he said.

"It's making people not want to move out.

"We all seem to be paying a lot more for things but we're not seeing anything for it."

As well as consumers feeling the pinch, businesses, too, face a tough times, as people leave their money in their bank accounts to take advantage of the rise.

Natalie Jones, 21, is the supervisor at the Art shop, in Regent Street.

She said: "We sell prints and decorations for the home.

"With this increase in mortgages, people will not be able to spare the cash to decorate their homes nicely.

"I am also trying to get onto the property ladder. A lot of people are in my boat.

"They arrive in a new place and rent a place for a while. But when they want to invest their money in a house they find they can't afford to."