While the interest rate rise of .25% to .5% was widely expected, any increase will have some impact on the housing industry - even a modest rise can add millions to housebuilding costs, and constrain house price growth.
At the current time, any weakening of the housing market is more at the higher end, which is not where most of the bigger house builders operate. The Government is also still committed to its Help to Buy scheme, which is helping to support the growth in house prices, particularly in the £250,000 region.
With demand still outstripping demand, and rates remaining at historic lows - with any rises expected to be modest - we believe the impact of the rate rise to be relatively small.
Guidance to investors
Like all other types of investment, property prices and demand for property can go up and down, and vary across different parts of the country.
According to Nationwide, the average UK house price has risen by 15% over the last 10 years. This growth though has been very unevenly distributed, with the average London property price appreciating by 56%, but falling by 5% in the North of England, 4% in Scotland, and 41% in Northern Ireland.
It is for this reason that we would recommend that you diversify your investments with us between a range of loans. This way, if one of your loans falls in value, the borrower falls behind schedule and stops paying regular interest, or we need to take formal action to recover the security, you have spread your risk across a number of loans.
You should therefore consider if you are over-invested in property. If you are you might end up in trouble when housing markets slow. To avoid this, you could diversify your portfolio by holding different kinds of investments and not just property.
For more information see https://lendy.co.uk/managing-risk