“Interest Rate Stabilising”
The latest decision by the Bank of England’s Monetary Policy Committee to keep interest rates on hold is clearly good news for homeowners – especially those on variable-rate mortgages, who have experienced five interest rate rises since last summer.
There are now strong indications that interest rates may have peaked and that the housing market may be stabilising as well. The Bank’s determination to control inflation seems to be working and the British Retail Consortium claims that rising prices are already being stamped out in Britain's shops, "With food inflation starting to ease and non-food prices continuing to decline, it is obvious that there are no inflationary pressures coming from the High Street." the British Retail Consortium’s Kevin Hawkins said.
Whilst house prices continue to rise, the rate at which they are rising did begin to level off and The Halifax said that July was the fourth month in a row to show a monthly house price increase below 1%. However the annual rate of property inflation might be starting to nudge up, as it currently stands at 11.2%, up from 10.7% the previous month. This comes despite the surge in supply prompted by both the June and August HIP implementation deadlines, interest rate increases and the miserable summer.
According to Martin Ellis, Chief Economist at the Halifax, "Sound economic fundamentals, high levels of employment and a shortage in the number of properties available for sale - particularly in London and the South East - will, however, continue to support house prices." |
