An estate agency chain claims the rising inflation rate – and the near certainty of no interest rate cut today – is actually good news for the housing market.
Paul Hardy, the managing director of the LSL Estate Agency Franchising chain, accepts that many consumers will be disappointed by this end of year economic problems.
But he says: “Leaving interest rates unchanged this time is a positive for the property market. After last year’s relentless increases, a steady rate provides a sense of stability that many buyers, sellers, and investors have been craving.”
The UK inflation rate rose to 2.6% in the year to November, according to official figures. The Bank of England typically raises interest rates to try to keep inflation at its target of 2%. Its next rates decision is at midday today but almost all analysts expect rates to be held at 4.75%.
Hardy goes on: “For prospective buyers reliant on securing a mortgage, the stability in rates offers breathing room to keep searching for the right property and for existing homeowners on variable and tracker rates, it eases concerns over further pressures on household budgets.
“Many homeowners and buy to let owners who fixed with a two year rate in 2023 and those who fixed with a five year rate in 2020 will be keenly following this decision – and the next on Feb 6th – as they approach their renewals in 2025.
“Overall, the decision to hold rates is another step toward restoring confidence in the property market and should encourage more movement as buyers and sellers adjust to the ‘new normal’ of the lending landscape.”
Nathan Emerson, chief executive at Propertymark, comments: “Many consumers will no doubt be disappointed that inflation has increased as we head towards the end of the year.
“There are still many national and global factors that impact the UK economy, so hopefully inflation will better stabilise in the early months of 2025.
“Considering the enormous challenges the UK economy has faced over the last four years, Propertymark keen to see a period of constancy that brings better levels of affordability and confidence for both buyers and sellers.”
