Boom times for homeowners since the slashing of interest rates to record lows could be coming to an end.
While the cost of servicing mortgage debt has continued to fall in the eight years since interest rates dropped to 0.5 per cent - only to fall again to 0.25 per cent last August - Britain's homeowners have benefited from a 40 per cent increase in the value of their property.
Figures from online estate agents HouseSimple.com suggest that although UK savers have suffered in the last eight years of record low rates, homeowners in London and Cambridge are huge winners.
Average prices in London have almost doubled in the period, while Cambridge average property prices are up 96 per cent.
However, some areas of the UK have still suffered house price falls. Hartlepool, Durham and Middlesbrough, all in the North East, are have seen prices fall by 9 per cent, 6.2 per cent and 4.5 per cent respectively.
“Millions of homeowners have increased their equity in their homes substantially in this once-in-a generation low interest rate environment,” said Alex Gosling, CEO of HouseSimple.
But change could be on the horizon. This month, minutes from the meeting of the Bank of England's rate setters, the Monetary Policy Committee, showed three out of the nine members voted for a rate hike.
“It’s been a golden period for UK homeowners, but there are signs that it could be coming to an end as the MPC narrowly voted to hold interest rates at 0.25 per cent.”
However today (20 June) Bank governor Mark Carney ruled out an immediate rate rise.
There have been several sets of figures recently suggesting that property prices are about to fall.
Property portal site Rightmove which records average asking prices, has announced a 0.4 per cent drop in June. This has pulled back the annual rate of price inflation to 1.8 per cent, its lowest level since April 2013.
“House prices are also under pressure from the political and economic uncertainty of Brexit and the fallout from the disastrous general election result for the Conservative Party," Mr Gosling said.
"There is no evidence to suggest that property prices are about to plummet, but homeowners and home buyers do need to plan ahead, and make sure they can cover the impact of interest rate rises on their monthly mortgage payments.”
Daniel Bailey, mortgage broker from Middleton Finance near Sheffield, said that property prices were still holding up in the north of England.
"We're seeing people still getting asking price or even over it," he said. "There's still a limited amount of property on the market and demand is there. It's very difficult to predict when rates might rise in this environment, but perhaps it will be next year.
