There is a lot to consider at the start of the New Year, but there is also something major in the housing market to consider from the end of last year. The increase in interest rates, as announced by the Bank of England, will impact the housing market.
If you want to make sure that you make informed decisions in the 2022 housing market, call on Williams of Petersfield, and we will be more than happy to assist you.
Key takeaways highlighted by Zoopla
Zoopla is one of the leading property portals in the United Kingdom housing market, and they have published their key takeaways regarding the increase in interest rates on their website:
- The Bank of England has increased interest rates from a record low of 0.1% to 0.25%
- The move means nearly 2m homeowners will have higher monthly mortgage repayments
- The increase will add around £14 a month to repayments for someone with a £200,000 mortgage
What are industry experts saying?
Suren Thiru, is the head of economics at the British Chambers of Commerce, who spoke about the increase in interest rates, saying; “The Bank of England’s decision to raise interest rates was surprising, given mounting uncertainty over the economic impact of the Omicron variant. While today’s rate increase may have little effect on most firms, many will view this as the first step in a longer policy movement – not as a partial reversal of last year’s cut.”
Eleanor Bateman, Policy Officer at Propertymark, commented: “The increase in base rate to 0.25% is a small and necessary step and one that most had anticipated for some time. Mortgage rates have been creeping up over the past few months, and while those on variable rates will see payments increase, the cost of borrowing remains low relative to historic levels. Though, traditionally, the winter months see a decline in activity, our Housing Market report shows sustained demand with average sales agreed maintained to the end of October.”
Eleanor Bateman continued by saying; “With indications that lifestyle factors are continuing to prompt many into making a move, we do not expect today’s announcement to have a significant, negative impact on the market. Continuing uncertainties over COVID-19 may, however, have more lasting effects, and we would urge the UK Government to consider the property industry’s significance in any forthcoming decisions on further tightening of pandemic-related measures.”
Paul Dales, chief UK economist at Capital Economics, suggests rates might need to increase further before too long. Paul said; “The MPC once again said that a ‘modest tightening’ of monetary policy is likely to be necessary, so this is not looking like a case of one and done. We still think that weaker economic growth and a faster fall in inflation will mean that interest rates won’t rise to 1% by the end of next year, but it’s just become more likely that they rise above our 0.5% forecast.”
Contact Williams of Petersfield for all your 2022 property market needs
At Williams of Petersfield, we aim to support the Petersfield community as much as we can, and we know this is an extremely trying time. A lot of people are looking for support and guidance, and if you have any property or housing related questions, we are more than happy to assist you, so contact us today.