Analysis: Latest rates rise means shattered dreams
THOSE of a certain vintage will readily recall the mid-1980s, in those inaugural years of the defining 'right to buy' Thatcherism policy, when council tenants and first-time buyers were getting on to the property ladder.
Back then, many of us locked in our mortgages at eye-popping double-digit interest rates (did anyone else do 15 per cent?).
Yesterday's three-quarters of a percentage point increase lifts the base rate to 3 per cent, the eighth monthly lift in a row and the single biggest in 32 years. Indeed it's 14 years since we were last at 3 per cent.
And while we're nowhere near 80s levels just yet, such a sharp and sudden hike for those whose mortgages have been fixed very low for very long will leave them reeling at the change.
Three quarters of a percentage point mightn't sound much when you say it quickly . . . but it may already have shattered many people’s dream of owning their own home or starting their own business.
Make no bones about it, the Bank of England's latest move - accompanied by a grim warning that the UK could be on the cusp of "its longest recession since reliable records began a century ago" - will slam the brakes on the north's property market, which has already been showing signs of slowdown.
It will have a particularly catastrophic impact on anyone coming out of a fixed rate, lumping thousands of pounds more a year on to payments, even for a modestly-priced home, and forcing people to change their spending habits at a time when there's already a vice-like grip on their purse-strings.
For example, those coming off a fixed rate mortgage at 2.5 per cent, renewing a 20-year mortgage of £130,000 (bear in mind the overall average price of residential property in Northern Ireland in the first quarter of 2022 is £202,325) could see around £3,000 a year added to their bills if they lock in a rate of, say, 5.5 per cent.
Indeed what's happening right now with interest rates (and we can expect the needle to go higher still by next spring) may see future generations here being completely frozen out of owning their own home because they simply can't get a mortgage, and if they do, the monthly payments will be increasingly unaffordable.
The knock-on impact will be felt across the board too, with business loans credit card payments increasing too.
Months of political chaos and incompetence have played havoc with the economy, and people here are suffering as a result.