In August this year the Bank of England, raised bases interest rates from 0.5% to 0.75%, the highest increase for a decade. This coupled with the Brexit uncertainty and the ripple effect of a falling London Market has resulted in a few months of price adjustment across properties in Essex and Hertfordshire.
3.5 million home owners who currently have a variable mortgage would have been affected by this base rate interest increase, reflected in a rise in their annual mortgage payments. Figures from the BBC state that someone with a mortgage of £150,000 and an interest rate rise to 0.75% is likely to see their yearly mortgage payments increase to £224.*
However this new base rate increase isn’t all bad news as it shows that the BOE has confidence in the economic outlook for the UK.
Andrew Kershaw, Area Sales Director of Intercounty commented “Looking at the wider picture in more detail, Nationwide’s Chief Economist Robert Gardner has stated that house price growth for the twelve months to August, across the whole UK, was slower than expected, whilst prices rose by 2%, they fell short of the 2.7% predicted. However, house prices are still expected to rise by 1% overall during 2018. ”
He continued: “The fundamental forces affecting the market are likely to remain challenging and will not be helped by the Bank of England potentially increasing interest rates further, Rightmove stated that year on year sales agreed are down marginally by .8% but holding steady and some upturn in prices and buyer activity is to be expected in the Autumn period, especially if buyers are tempted by realistic pricing from vendors.”
“Properties that have languished on the market over the summer months are also getting good success by re-launching these properties with new professional photography and write ups as well as reappraising the price in line with current market expectations. We are focusing on the next 8 weeks of good selling time and are creating individual plans with our vendors to help get them sold,” he adds.
We are now in a window of good selling time as people look to sell before “Christmas” so if you are looking to make a move this Autumn get in touch with your local branch of Intercounty.
Your property could be at risk if you do not keep up your repayments.