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What's the news on the 5.25% Bank Rate and the UK property scene?
Well, the Bank of England just bumped the base rate for the 14th time straight to 5.25%. It's the highest since 2008, tacking around £300 extra each month for every £100K borrowed, compared to the pandemic's 0.1% low till the end of 2021.
Check the graph below for the rise in owner-occupier mortgage costs by 2023 and 2026.
Eye-watering, right? But hey, think about 1979's 17% rate blast and double-digit inflation! We've been hovering on abnormally low rates for 15 years, forgetting the "normal."
Before Jan 2009, the Bank rate never dipped below 2%, averaging 9.12% over 50 years. Since 1694, it's 5.91%. So, 5.25%? Not so unusual, it's the sub-2% stuff that's odd. Even when the rate bumped from 4.5% to 5% in June, sales dipped just 2.21% the next week. Buyers are still eager, despite the squeeze.
People understand the era of rock-bottom rates is over, and a long-term vision is now on. First-timers buyers are still keen, despite the rate hike. In short, costlier mortgages, but homes are still hot if priced and marketed right.
Need mortgage market wisdom? Our local Mortgage experts are here to help.
Call them now on 0121 323 4999. 📞
MORTGAGES & INSURANCE
“There may be a fee for arranging a mortgage and the precise amount will depend on your circumstances. Our typical fee is £349 and only payable on mortgage application. There is no charge for an initial consultation.”
Thinking of selling? Use the link below to find off-the-market properties or call us on 0121 296 1400 to book a valuation.
https://greenandcompany.homesearch.co.uk
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