The Bank of England’s decision to raise interest rates to 3%

Nick Leeming, Chairman of Jackson-Stops, following The Bank of England’s decision to raise interest rates to 3%, comments:

“After a challenging September for the markets, today’s decision to raise interest rates again was largely expected by businesses, market spectators and consumers alike. Not entirely unchartered waters for savers, it’s important to remember the pre-financial crash context. While savings and mortgage rates have been objectively low since 2008, this period has been far from the norm by historic standards.

“With the exit of one Prime Minister and the appointment of another, the market has been provided with a sense of calm seeing the pound also stabilise against the dollar. However, striking the balance between raising interest rates and controlling uncomfortably high levels of inflation may lead to difficult decisions for the Chancellor on November 17th.

“For the property market, broadly we are seeing a natural seasonal slowdown in enquiries but in some instances, this has been twinned with a sense of “wait and see” from buyers in the wake of Octobers fiscal events. Reassuringly, Jackson-Stops’ national branch data shows a steady wave of viewings, combined with an uptick in supply as many choose to list their homes now while house prices remain buoyant.

“Resilient house prices can in part can be attributed to a commitment from buyers to push for completion before Christmas. However, what will become even more important for sellers as we head into the New Year is the need to be realistic with asking prices. It remains crucial that property prices are not over inflated and remain competitive to real time sold prices, aligned to similar properties in the local area.

“At the prime end of the market, where cash purchases are more likely and the impact of mortgage rates is felt less acutely, the market outlook is much steadier. But even still, the vast volumes of offers from buyers and double-digit viewings that felt routine earlier this year is a thing of the past, as the post-pandemic market frenzy readjusts to its new normal.”