Farrell Heyworth Estate Agents help you find your next home, sell your current home or rent out your property. We are a one stop shop because we specialise in Residential Sales, Lettings, Auctions, EPCs, Mortgage Services, Conveyancing and Surveys and Valuations. FH are one of the largest independent estate agency groups, with over 600 Home Sale Network offices and 20 Farrell Heyworth offices in the North West.
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With Bank of England governor, Mark Carney, finally announcing that interest rates were set to increase at the turn of 2016, many of us began looking at remortgaging to a fixed rate to take advantage of the record-low levels before they increase.
 
But, with the news of the economic slowdown in China and the subsequent falling stock prices in worldwide markets, including in the UK, a delay in the rate rise may yet again be on the cards.
 
John French, Sales Director of Mortgage Advice Bureau at Farrell Heyworth Estate Agents, discusses how and why China’s slowing economy could lead to a longer period of record-low rates.
 
What’s happening in the stock markets?
 
Initially thought to be the stock markets simply correcting themselves, the fall has been heavily influenced by the economic slowdown in China, in turn caused by a number of factors, including the country’s burdening debt from its borrowing “binge” in the last 5-8 years and the actions of its self-regulating banks.
 
The FTSE 100 (the index of the UK’s 100 biggest companies), closed at 4.6% on 25th August as a result and, with the slowdown now looking much more substantial than a “technical correction”, it could affect the rest of the world in a bigger way than first thought.
 
How does this affect interest rates?
 
With the FTSE currently in a relatively unstable position, the Bank of England’s Monetary Policy Committee (MPC) is likely to delay any potential rate rise until further into 2016, whilst the markets return to their pre-China state.
 
Wider market confidence plays a key part in the MPC’s decision on the direction of interest rates and with the current turbulent state of the markets, those of you who sit on variable-rate mortgages may be able to rely on record-low mortgage rates for a little while longer than previously anticipated.
 
What’s next?
 
As proven, it is incredibly difficult to predict the absolute future of interest rates.
 
Whether this slump has any further to go or how long it may take for markets to recover is yet to be seen, which makes it all the more important that you seek advice from a professional mortgage adviser when discussing your next steps.
 
For further information call into your local Farrell Heyworth office, Freephone 0800 389 1666 or visit www.mortgageadvicebureau.com/farrellheyworth.
 
Your home may be repossessed if you do not keep up repayments on your mortgage.
 
There will be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1.5% but a typical fee is 0.3% of the amount borrowed.

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