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Small rate rises won’t make a difference: Guy Stephens

Any rate rise in the UK will make little or no difference to mortgage holders or savers, Guy Stephens, of Bristol-based Rowan Dartington Signature, has claimed.

Referring to the no-change announcement from the Federal Reserve Bank on US interest rates in September, Mr Stephens said: “We can rarely remember so much noise and speculation surrounding an event that did not happen.”

He said similar hype and “market preoccupation” with the big issues of UK/US interest rates, and the Chinese slowdown, was “misguided. Interest rates affect mortgagees and savers, but not by much as any move is likely to be no more than 0.25 per cent.

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“What difference does it make? This is detached from the performance of the real economy, which is measurable in many alternative ways, and has been driving bond and equity markets for weeks and months.”

Adviser view

Mark Harris, chief executive of London-based mortgage broker SPF Private Clients, said low rates had made lenders keen to lend.

He said: “This has resulted in some competitive mortgage deals. The mortgage market remains oversupplied, with lenders having more money to lend than there are people looking for home loans. This means criteria will have to loosen and rates will have to remain low to ensure lenders hit their volume targets.

“So despite fears of an interest rate rise next year, there is still some excellent pricing on fixed rates, with five-year deals available at less than 2.5 per cent.”