Interest Rates and Housing Market – Now What’s Happening…

This is an article on Interest Rates and the Housing Market By: Justin Phillips – Principal and Mortgage Adviser at Open Vision Finance.

The coming 12 months are particularly tricky to predict with regard to interest rates and where they are heading, due mainly to not knowing what kind of deal, if any the United Kingdom will leave the EU with.  This had led to more split opinions for some time with regard the future direction of interest rates.

We have industry, banking and economical experts predicting anything as much as 2% interest rate rises through 2019, to many predicting that rates will remain as they are at 0.75 of 1 percent and many even suggesting a rate decrease is possible.

One thought behind the rates remaining the same or even reducing is that should the UK economy require some level of support (due to the Brexit imbalance) the government could once again step in as it has before to ease up the borrowing of monies, giving some level of support provided to banks to enable consumers to borrow monies competitively which could see consumer spending improve.

It’s difficult to predict the outcome but we shouldn’t expect too much of a change given these uncertain times for the UK.

Housing Market

I have seen all sorts of headlines over the past 6 months with regard the housing market, one in particular published by the RICS stating the poor state of the housing market and how it’s being effected, yet in contrast I have read some articles suggesting the market is and will continue the upward trend due to the general shortage of homes in the UK; so in reality is it really struggling?

Let’s remember, that traditionally November, December and even in to January are slow months for the housing market and it would be a natural observation to see the housing market ‘slow’ somewhat over this period.  It seems already in January 2019 the market is showing some signs of movement with some estate agents reporting a far better than expected market in January thus far.

Officially January’s house price index outlines a ‘muted rise’ in prices, which is actually a positive start.  To further substantiate this, the report also shows a 5% increase in prospective buyers; so whilst the market clearly slowed down toward the tail end of last year, we have already seen a modest 0.4% increase in the average property price for January 2019.

Estate agents are reporting activity is now picking up and there is a lot to be positive about… Due to a slower November and December, there are likely more houses on the market and with historically low interest rates still supporting prospective buyers and movers, the markets outlook is bright and resilient looking ahead in to 2019.

If you have found this article interesting or would like to arrange an appointment with one of our experienced mortgage consultants (Mortgage Advice Taunton, Bristol and the South West Region), please get in touch with us on 01823 444022 or by email to advice@openvisionfinance.com.