It was perhaps no surprise to hear today’s announcement that the Bank of England has increased interest rates to 1.00%.
With a decade of historic low interest rates, and the last increase of 0.25% in March, the Government needs to keep inflation to its target of 2%.
Regarding inflation, the invasion of Ukraine by Russia has led to further large increases in energy and other commodity prices, including food prices. It is also likely to exacerbate global supply chain disruptions and significantly increased the uncertainty around economic outlook. Global inflationary pressures will strengthen considerably further over the coming months, while growth in economies that are net energy importers, including the United Kingdom, is likely to slow.
So, what does this mean for the super prime housing market? Higher interest rates will certainly mean a hike in mortgage repayments for most, which could dampen down the demand for high value properties. However, currently, this doesn’t appear to be the case with recent data revealing that we are still experiencing a healthy appetite for prime properties. For example, during Q1 of 2022, we have seen a solid demand for high value housing stock (those valued above £2m) in the UK, with 32% more instructions than in the prior year. The availability of properties to buy has also risen in line with demand (source: TwentyCi, April 2022).
However, for those looking to secure a loan to finance a super prime property purchase, higher interest rates could mean significantly higher loan repayments. Fortunately, there are options available, including potentially low cost, fixed rate loans with terms to suit individual circumstances. These will not only help to manage current rate rises but will also mitigate against near future rate rises too, helping you to confidently manage your repayments.
We are here to help
If you are looking for a new mortgage or want to look to switch to a cheaper rate to avoid any future increases, call our team of specialist mortgage advisers today on 020 7519 4900 to see how we can help refinance your mortgage.
It was perhaps no surprise to hear today’s announcement that the Bank of England has increased interest rates to 1.00%.
