If inflation in the UK continues to rise, it could lead to two scenarios for the real estate market. In the first case, buyer demand will fall and loans will become more expensive, in the second – the demand for housing will grow, as the purchase of real estate will be seen as a way to save money.
At the same time, house prices in Britain have fallen for the first time in 11 years. If mortgage rates rise, property values may also fall, but loan holders will have to pay more because of the increased interest rate. The cost of housing is directly affected by the term of the mortgage loan. Every fifth bank customer who takes out a mortgage indicates the term of its closure at 35 years, reducing the amount of monthly payments. However, in this case, banks are forced to raise the rate in order not to lose money.