This week’s Star Letter goes to Paul Barnden for his comment under the post:
Mortgage brokers urged to put Brexit at centre of client meetings
He writes: “In 2011, I read an article whereby 30 top economists were polled on where they thought the base rate would be by the end of 2013 – responses ranged from the status quo being maintained at 0.5% to 3.5%.
“These were the answers from professionals who spend their days analysing and studying these issues – I question how I am to foresee how the market place will unfold in the coming years. To me it is a case of studying my clients’ circumstances, looking at affordability, their budget and their attitude to risk – no different to what I did following the financial crisis.
“At that time with the uncertainty of rates some of my clients (possibly spooked by press speculation) wanted the stability of a five-year fixed (paying in excess of 6%) on the basis that the rate was affordable and that they wanted the comfort of knowing their monthly payment – hindsight of course told us that this was to be a costly decision.
“In the current climate, for those wanting medium-term security, medium-term fixed rates are fantastic value, particularly for lower LTV products but as advisers we need to consider many other factors in order to be able to recommend the most suitable product. There will always be forces that could impact on our market and only time will tell whether typical interest rates will be 2%, 5% or 7% in three to five years or so – we need to have these conversations with our clients to establish what impact a rate increase would have on them.”
