Tag Archive for 'UK Interest Rates'

Interest Rates Rise!

Published
by
Property Know Team
on November 14, 2006
in Property Know
. 0 Comments

After huge speculation over the forth coming interest rates, people’s predictions have been confirmed. We at Rent Home Manchester, probably like most of you out there, believed this was going to be the inevitable outcome. On the 9th of November 2006, interest rates rose from 4.75% to 5%, its highest level since September 2001.

Mervyn King (head of Monetary Policy Committee); decided upon this rise due to number of reasons, firstly there has been a sharp increase in prices in all aspect of the economy. In particularly the housing market has seen considerable prices rises, as house price growth has exceeded expectations due to a shortage of supply. Following this we have seen positive economic growth, an increase in consumer confidence and in particular a substantial rise in energy prices.

The rise in interest rates is necessary in order to curb inflationary pressures, especially house prices which are continuing to rise about 8% every year, and at the same time needed to promote economic prosperity. However this news won’t come lightly to home owners, as this will no doubt increase their mortgage payments. For example a person with an £150.000 mortgage will expect roughly a £20 increase a month on their existing mortgage. Consequently this will place added debt problems with many more increasingly finding it difficult to make repayments readily, on an already over stretched debt nation.

Although we at Rent a Home Manchester, believe the rise in interest rates won’t have a significant effect on peoples spending habits, nor will it cool down the property market. As we have seen in the past years it hasn’t been borrowing costs affecting the housing market, instead it has been the supply and demand of houses. We are still witnessing a shortage of supply and considerable high demand; therefore prices can only continue to rise rapidly. We expect property prices to rise in the near future, due to the consequence of population growth, especially the expansion of the European Union, and a trend of number of people living alone, but remember this is only Rent a Home Manchester own opinion.

Interest Rates; First Time Buyers

Published
by
Property Know Team
on October 11, 2006
in Property Know
. 0 Comments

On 5th October 2006, The Bank of England’s monetary policy committee kept interest rates at its current level of 4.75%. With predictions of an interest rate increase for next month, it looks like a rocky road ahead for first time buyers once again. Whilst trying our best efforts to save every penny for that perfect home whilst property prices continue to rise.

For first time buyers’; jumping onto the property ladder just doesn’t seem to get any easier. However there is light at end of the tunnel, where first time buyers are concerned they do have a certain degree of advantages. Firstly interest rates have been their lowest for the past 30 years making it a lot cheaper to borrow nowadays and high street banks providing you competitive offers in order to attract your custom, am sure there is a good deal out there in the market for us all. In fact most first time buyers have no chain involved, this means they are not waiting for their own property to be sold in order to move in the new, therefore a quicker transaction can be made with less hassle, this will no doubt make you more appealing to home sellers.

This means all you need to do now is look for the right property in the right location and the right price tag! We will be posting some of the most sought after property developments in Manchester!

Good lucking property hunting!