The interest rate announcement yesterday by Mark Carney, the new Governor of the Bank of England, was music to the ears of many homeowners. His statement spelled out a major shift in monetary policy, with the result being that interest rates will now not rise until the unemployment rate sinks to 7%; a decrease which is not expected for another three years.
The news is very positive and should add further confidence to what is an already buoyant market. It was not however as positive for savers and retirees, both of who will no doubt suffer the effects of low interest rates and annuities for the foreseeable future. For homeowners and house buyers however, fixed rate mortgage deals should fall even further to remain attractive and we’ll likely see a surge in those opting for a five year fixed deal which will take them past the 2016 estimated interest rate rise.
On top of the already busy market, we’ve seen buyer registrations across our network of more than 50 branches increase by over 100% in the last few weeks compared to the same time last year, which is incredibly unusual for August and is a further indication of just how strong the market is. Taking into account this announcement, we should see even more buyers enter the market, swayed by attractive mortgage deals and the recent loosening of lending requirements.
Buyers are confident and this looks set to continue further through the summer and well into the rest of the year. As we enter the busy Autumn season, we expect to see more sellers enter the market who are keen to capitalise on the phenomenal growth in property values and as a result supply of properties should increase. By the end of the year I expect we will see an increase in transactions of around 15% – 20%.