The Bank of England Monetary Policy Committee has today announced a rise in the bank base rate from 0.1% to 0.25%. This was surprising considering that they held off doing so last month when conditions we not dissimilar. Nevertheless, with inflation soaring over 5% (the target is 2%), the bank was bound eventually to do something in response to rising prices and a “Post Covid” hike in consumer spending. It was thought that the new Omicron variant might prevent such a rise, but apparently not.
So what does this mean for the housing market? Actually very little in our opinion! The rate increase, when passed on to mortgage borrowers is likely, on average, to cost homeowners £10-£15 a month more, which is hardly game-changing. Demand is still considerably ahead of supply as people continue to seek new property lifestyles, and we don’t expect to see any reduction in this demand. Indeed, we are gearing up for a massive spike in enquiries between Christmas and New Year, when people have time to consider their position and cruise the property portals. (Last year Rightmove reported 51 million hits between Boxing day and the first day back at work).
It’s not too late if you wish to take advantage of this expected frenzy! Please feel free to contact us today and we’ll be happy to advise you on the best way forward.
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