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High Five – Market News

about 1 year ago
High Five – Market News

The Bank of England (BoE) has made the decision to increase the base rate to 5%.  The Bank explains the rise is being used as a mechanism to try and curb inflation that they have stated they want to try to get to 2%.

In 2000 the base rate was 6% and typically fluctuated between 4% and 5.75% right up to 2008 (with a low of 3.5% in 2003).  Post the ‘Credit Crunch’ period interest rates were set historically low and dropped to 0.1% during the Pandemic crisis years.  

How is the local market being affected by the development? Michael Bolger, Area Sales Manager, comments:

‘After a decade of ultra-low interest rates, it would appear that as a country we need to acclimatise to higher rates, more in line with the historic, longer-term averages of around 5%.

‘From a market point of view, since the ‘Credit Crunch’ borrowers have been stress tested on their ability to pay at 3% above their interest rate so the impact while not ideal of course, should not have a material impact on people.

‘In terms of the overall picture, Knight Frank did some research at the end of last year, and mortgages only account for about 20% of the overall UK housing wealth (£1.6 trillion outstanding on £8.4 trillion of wealth) and net migration to the UK was reported at just over 600,000 last year,  with the issue of building homes becoming a political minefield. 

‘As with all types of market though, regional and even street-by-street values and marketability can vary enormously – so please get in touch for your valuation, and we can set you on the road to get the best value possible.’

Please get in touch with Michael Bolger, our Area Sales Manager to set up your valuation.

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