Niche lending sees “limited effect” of rate rise

Niche areas of mortgage lending have experienced limited effects of the two base interest rate rises that took place in August and November 2006, according to a survey by UCB Home Loans.

Some 15 per cent of brokers in the self-certification sector thought that the rate hikes had affected their sector, with the remaining 85 per cent saying there had been no effect.

Almost a third (30 per cent) thought that their business had increased in the past four months, while 58 per cent said it had stayed the same.

More companies thought that the buy-to-let sector had been affected, with 40 per cent saying the market had been influenced by the rate changes. A third said that buy-to-let business had increased in the past four months and 42 per cent said it had stayed the same.

Keith Astill, managing director of UCB Home Loans, said: "Despite the fact that rate rises have had some effect on the self-certification and buy-to-let sectors, the majority of brokers are still reporting that business has been growing."

Brokers were also asked about their opinions on house prices, with 85 per cent expecting them to be higher by the end of next year than at present and only ten per cent thinking they will remain static.