Its been a couple of weeks now since the rise in interest rates was announced by the Bank of England. Plenty of time for the dust to settle on the first rise in interest rates for 7 years. But does it matter? What will it mean for home owners and for potential home owners? All the evidence suggests it will have little or no difference. A large proportion of home owners have fixed rate mortgages, which as the name suggests the rate is fixed and wont change for the life of the deal. Most lenders had factored in the rise into the long term fixed rates some time ago. So who will be affected? Those on tracker rate mortgages will see there rates rise – but they will still be at historically very low level. The group most likely to be affected are first time buyers. These are the group who are most likely to be financially stretched, and also the group who tend to pay the highest rates. We are already seeing some struggling to meet the increased rates.
The result is we are seeing a slow down in first time buyers which is resulting in a slowing of house growth to just 5.4% nationally but in London this is being exacerbated by a fall in foreign investment leading to just 2.5% annual growth in London).
If you are looking to sell or relocate how can you mitigate this downturn. Well not all agents are experiencing the same degree of slowing. We actually had one of our busiest months ever with record sales in October. Call us to find out more – or email firstname.lastname@example.org .