Earlier this month The Bank of England’s monetary policy committee raised the interest rate base rate from 0.5 per cent to 0.75 per cent. It’s predicted that the interest rate hike will only modestly affect house prices, according to economists in the local area, as the vast majority of mortgages are on fixed rates for years to come. So, will a 0.25% increase in interest rate affect the Leicester property market?
Will buyers be more cautious?
Uncertainty may cause buyers to be more cautious than they have been in recent years, meaning they are now more price sensitive when it comes to moving home and are taking longer to make decisions. However, many people will not be put off by an increase in interest rates, especially as it has only increased by 0.25%.
In Leicester the property market will always see a push on family homes and city centre apartments, so a desirable property in a strong location should sell just as quickly as it would have done before the 0.25% increase in interest rates.
Should you delay buying?
The general consensus is that there’s little to be gained in waiting to buy and that buyers should look for a property with a view to keeping it for the mid- to long-term. Property is nearly always a long term investment, with the average mortgage period of new homeowners being 30 years, so over this period interest rates are bound to lower and increase.
All buyers need to ensure that they are in a safe financial situation when buying a property, no matter what the interest rate is currently at.
What does an interest rate increase mean for Leicester house prices?
Traditionally, higher interest rates mean that house prices are marginally lower, and experts anticipate this will remain the case for the short term. Higher interest rates mean higher mortgage rates, which can scare some buyers but if a buyer is genuinely interested in your property an increase by 0.25% will not put them off putting in an offer.
If your property has many of the popular features many homeowners look for such as good local amenities, outstanding school catchment area, large living space and easy access to Leicester city centre etc then it will not sit on the Leicester property market very long.
Buyer and seller activity in Leicester typically picks up in September. September is traditionally a month for new beginnings and fresh starts, making it a very busy period for the housing market, and sets the tone for the rest of the year. We should also get a better idea how buyers are sellers are feeling, and whether the likely small rise in interest rates has had any immediate impact on Leicester property market very soon.
As a Leicester estate agent with many years of experience in the property industry, we can help you through the complete process of both buying and selling a property. Get in touch with Open House Leicester today using either 0116 243 7938 or firstname.lastname@example.org and to talk to our helpful team.