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Interest or Inflated Prices

Hello again everyone, I hope that you have all had a great easter and hopefully managed to enjoy the break as much as you did the chocolate. This is the first year that I have managed to abstain from eating chocolate like it was going out of fashion.

It was very apparent that people were not buying in to the commercial side of easter as much this year as in the past. The shops did not seem to be stocking as many eggs as usual, there weren’t as many adverts on the television as in previous years and many of the pubs and restaurants did not hold any events like they did in the past. Was this a direct result of the cost-of-living crisis? Was this the same story throughout the country?

There is a direct correlation between the rise in inflation and the rise in the interest rate. Currently (as I write this blog) inflation is at 7%, which is up from 5.5% in January and continuing to rise with a prediction of a minimum of 8% by the summer and even higher by the end of the year. Interest rates started 2022 at 0.25% after being at an all time low of 0.1% in December 2021. They then rose 0.5% in February to 0.75% and the next announcement is due at the beginning of May where it is widely expected to rise to 1% or higher.

Now all of this might seem to be just boring maths or just plain boring but it does have a knock-on effect to every single person. Inflation means that all of our bills are increasing, gas, electric, phones, tv’s Netflix, bread, eggs, petrol even easter eggs are getting more expensive, do you see what I did there? As many of you struggle on a daily basis to make ends meet with finances, some things have to go by the wayside. Raising the rate if interest is the Bank of England’s way to try to keep the rise of inflation (cost of living) under control. Some business leaders are stating that the current cost-of-living crisis is affecting people more that the Covid-19 pandemic and that more individuals will need state assistance than have used the furlough scheme.

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Some business leaders are stating that the current cost-of-living crisis is affecting people more that the Covid-19 pandemic and that more individuals will need state assistance than have used the furlough scheme.

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Please do not think that this is simply the ramblings of a bored property professional but instead consider it an insight to what is about to happen in the housing market including the rental market. The UK property market boom might soon be over, as experts are predicting that prices might fall by as much as a tenth in 2023. According to the latest figures, property prices have increased by an average of 14%, or £33,000, making it increasingly difficult for first time buyers to get a foot on that elusive first rung. If prices do start to recede to normal levels, then we might see the first signs of “Forced Sales” as costs will get the better of some homeowners who will not be able to stay on the property ladder.

 

An extract from “The Times” (click here) states that the demand for more rural locations will remain as post covid home working will continue to be popular.  

“With working from home likely to be a more permanent part of many people’s lives, demand for properties outside cities and commuter belts has jumped. Lockdowns highlighted the value of greenery and space, triggering a surge of interest in properties in rural and coastal areas, according to ONS statistics. House prices in some hotspots – such as Conwy in North Wales, North Devon and Richmondshire in the Yorkshire Dales – have risen at three times the national rate. House prices in Scotland, meanwhile, rose 16.9% over the year to August – against a growth rate of 9.8% in England and 12.5% in Wales –  estate agents reporting significant interest in rural and remote properties there. Click here 

 

Meanwhile, seven London boroughs have seen price falls. Click here And Londoners bought a record number of homes outside the capital in the first half of the year”. Click here

“In this respect, in large part due to the “race for space” in rural and coastal areas, many housing market predictions remain bullish: Hamptons house price forecast is for a rise of 3.5% a year between 2022 and 2024. Lloyds Banking Group expect house prices to maintain their current strong levels over the next year, but growth to be much flatter through 2022, at around 1%”

 

I would like to add that at the moment here at Cross Keys Estates, the market is still strong, there are still many, many buyers out there looking for property and borrowing is still at a very low interest rate making buying still a great option instead of renting. If you would like a personal chat with me to see if now is the right time for you to sell or rent out your property, please feel free to either give me a call 01752 500018 or pop in to our Mannamead office where I or one of my experienced property consultants will be only too happy to see if we can help.

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Cherry Tree House
34 Mannamead Road
Mannamead | Plymouth | PL4 7AF

Tel: 01752 500018 

www.crosskeysestates.net

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