The interest rate rise doesn’t have to spell “doom and gloom” for intermediaries says GMAC-RFC.
Jeff Knight, director of marketing at GMAC-RFC, says: “The industry has expected another rate rise for some time, but I did not expect it to happen as early as January, so this has come as a slight surprise.
“With inflationary pressures set to continue, I believe the market will see another rate rise later in the year to 5.5%.
“It is difficult to see a rate rise higher than this in the next six months, but I wouldn’t rule it out before a later reduction.
“There is no doubt that this rising interest rate environment will make the mortgage market a tougher place in 2007.
“The picture isn’t all doom and gloom for intermediaries.
“Rate rises force those with mortgages to look for better deals so new business opportunities can still be found through clients who need to remortgage.
“In addition, as intermediaries embrace technology they will be able to free up more of their time to do more selling.”