Will Mark Carney be forced to increase UK base rates?

[totallyproperty]

While the UK property market continues to flourish and the economy is eventually showing signs of recovery there could be a blot on the landscape in the short to medium term. Despite attempts to retain base rates at current levels there is a growing perception that Mark Carney, the Governor of the Bank of England, will be forced to increase base rates, which will mean a rise in UK mortgage rates.

What kind of impact will this have upon the UK property market?

 

[Cred]

This has always been my primary concern. Whether you look at it from the affordability of a buyer or the risk free yield that an investor could get just putting their money in the bank. Assuming rents don't change, a higher interest rate means lower property prices.

Interest rates have been falling for 30 years so its hard to separate real demand growth from the falling rates and lately financial repression. Raising rates from these levels could cause serious issues if its ever allowed to happen.

I've no idea whether I'm right of this or not but I'm very wary of investing now just as rates turn up.

 

[totallyproperty]

This is one of my major concerns - as the economy and property markets continue to recover we will move back into the old "over heated" situation of years gone by. The only way to combat this is......a rise in interest rates to make short term finance more expensive therefore reducing borrowing and spending.