The Bank of England has announced an increase of 0.25% to its Base Rate this month. This is its 11th consecutive rise, pushing interest rates to 4.25%, the highest they’ve been for 14 years. The move is designed to curtail inflation which has impacted everyone.
By coincidence, Nationwide announced a reduction in the interest rates on several of their mortgage products on the same day.
Then, on 15 March, Chancellor Jeremy Hunt presented his Spring Budget and said that he expected inflation to fall back to 2.9% by the end of the year. The markets received this as a positive sign and indicated that interest rates had either peaked already or were about to peak.
Prestwick Market Update
The uncertainty regarding mortgage rates has had little effect on the Prestwick housing market which has been very busy in March.
Despite predictions of a housing collapse being on the horizon, nearly all recently listed properties have been sold in a rapid manner with many of them achieving more than the Home Report valuation.
As we expected, increased costs across the board have helped to limit the offers over the HR valuations in a lot of cases compared to the giddy heights of last spring. However, the impact has not been as expected and many properties, depending on their competitiveness and location are still seeing substantial premiums over HR.
First Time Buyers are beginning to see some encouragement in eyeing entry-level properties where they can get involved and where the premium is not as marked as the prestigious bungalow market. That includes Flats where the market is also strong, especially two bedrooms on the ground floor.
In short, the market is lively at present, and while some of the press are determined to make you feel that the crash is just around the corner, the levels of activity at present are healthy and government predictions for the economy at large bode well for a stable housing market.
If you would like to read what Rightmove think about the impact on mortgage rates, click here