We’ve all heard the news recently that interest rates have risen again and a gain over the past few months. This, combined with the ongoing cost-of-living crisis can make it difficult to make sense of the best way forward. In this article, Real Estate solicitor Megan Long explains the steps you can take to be proactive before any further rises.
The Bank of England have increased interest rates again, and on 3rd November 2022, they announced an increase of the base rate to 3%. This represents the largest single interest rate rise in 33 years. Commercial property prices have experienced a deceleration across regions as financial conditions have tightened.
Over the last few months, we have seen that mortgage companies are pulling mortgage offers or increasing terms. For some clients, it has not always been possible to extend mortgage offers on the terms which have already been agreed. For others, the increasing financial pressure has meant that they may not be able to obtain an offer in the future due to issues such as loan to value, interest rates and other affordability reasons.
There is a general consensus that more rises are to come. As Commercial Real Estate solicitors at HCR we will always make a crucial effort to ensure that matters are prioritised around mortgage offers but there are steps that you can take too.
Steps you can take
- We would always suggest that you put your best foot forward and act now. If you are intending to finance a property transaction or even re-finance an existing property, seek advice from a mortgage advisor to get the best possible terms as early as possible.
- Secondly, instruct a solicitor to deal with the purchase or re-finance as early as possible. You can even do this before an offer is issued. Unfortunately, most lenders do require a full due diligence exercise to be carried out and others even instruct their own independent solicitors. The sooner we are instructed, the sooner we can ensure that the legal side of things is completed ahead of the offer expiry date and hopefully in time before a further rate increase.