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From: Property Secrets UK
newsletter, October 2003
So the Bank of England almost stopped the property market in its tracks right? As some of our observant
readers spotted It turns out that 4 out of
9 of the committee members voted to raise interest rates
(4/9) in their October meeting and it was only the deciding
vote of the Governor that prevented However, this doesn't seem to have held back the property market and is it increasingly likely that the rates will rise at the next Bank of England meeting (around 7th November). So, if you are going to fix your finance, then you shouldn't delay. 5 year fixed rate mortgages
below 5.5 percent are still available. See But what does this mean for the rest of us? Well, we started out the year (2003) predicting (and hoping) for a more stable housing market. In 2002 property increased in value by an average of about 25 percent (down from a peak of 30 percent), and we were looking for good steady growth of 10 percent in 2003. A long time property expert recently confided in me that he shivers when ever the property market grows at more than 10 per cent per annum! Latest property price increase figures show annual increases to end of September of about 18 per cent - a bit too high for my liking - and too close to the boom (and potential bust) of 25 to 30 percent level. So, the 'shock' news that an interest rate increase is likely in the short term (next 6 months) is welcome - it will help to cool and calm down the market. Great! After all, we are looking to hold property long term - as that's where we see the profits. And, if that means that we get a slightly slower growth now, well that's cool! So, let's hope that the
Bank of England manage to switch a vote and put the rate up
to 3.75 percent. It certainly should create a few buying
opportunities of sellers who And, when nerves begin to settle in the Spring time and the market returns to its sound fundamentals, then we'd expect to see prices pick up strongly. |