(1888PressRelease)
May 09, 2007 - Stephen Smith, director of housing at mortgage distributors Legal & General, believes that given the inflationary pressures in the UK economy, a rate rise is extremely likely.
As a result, thousands of homeowners will "take a hit", Mr Smith said, which means a rise in the number of repossessions looks likely.
This is despite the fact that rates will not be anywhere near as high as they were in parts of the 70s and 80s - although there is speculation that the MPC will need to up rates to in excess of seven per cent in order to steer inflation back to its two per cent target.
"With inflation running away and the property boom ongoing, it is likely that the Bank of England will want to put a cool flannel on the economy's brow. A rise will turn the screw on borrowers yet rates are still at a relatively low level compared to the 70s and 80s," Mr Smith confirmed.
"Given the need to slow the economy down, it looks like borrowers who have overstretched themselves are going to take a hit."
Julian King from the UK's fast property buying firm National Homebuyers says: "This will be more than a hit, more of a bone crushing thump."
"National Homebuyers are offering a lifeline to those who have outstretched their means by providing a quick sale property solution and the opportunity to release the equity in their home.
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