Industry experts say the mortgage market has avoided disaster after the Scottish public voted to remain part of the United Kingdom.
In the build-up to the independence referendum on 18 September, there were warnings that mortgage rates could shoot up thousands of pounds because Scottish interest rates would have to be higher than that of the UK as the country would not have its own currency.
Moreover, financial institutions including Lloyds Banking Group, Royal Bank of Scotland, Clydesdale Bank, Standard Life and Aegon UK all announced plans to re-register in England in the event of a Yes vote, while ratings agency Moody’s also stated that an independent Scotland would have an investment grade A rating, below the UK’s higher Aa1 rating.
The mortgage industry has welcomed the No vote, with Association of Mortgage Intermediaries said the mortgage market has avoided the “huge banana skin” that would have come with a Yes vote.
He says: “On a personal level I am delighted that we have opted to remain a part of the Union. On a mortgage intermediary level, we are delighted as well because the uncertainty that independence would have placed sterling and interest rates under great pressure, and subsequently mortgage rates and payments.
“These factors can cause huge economic damage and for something that was just not required in order for Scotland to grow and develop as a nation. We have certainly avoided a huge banana skin, which would not have served either side any good whatsoever.”
Your Mortgage Decisions director Dominik Lipnicki says: “Without a doubt we’ve dodged a bullet. A Yes vote would have been a disaster not only for the mortgage market in both countries but for both economies as a whole. It would have reversed the recovery that we have seen.
“The Scottish housing market would have seen a demise and with no currency union, it would have been an absolute catastrophe in terms of keeping a mortgage.”
Private Finance managing director Simon Checkley says: “The result avoids a potential disaster and with lenders being able to create long term plans for Scotland and the focus for a lot of the Scottish people returning to normal, we believe it is full steam ahead.”