January’s quarter point interest rate rise to 5.25% may prove to be a major reality check for speculators hoping to profit from further house price rises and encourage them to sell now and help to feed the massive demand for property. The rise is not, however, expected to meaningfully reduce buyer demand, which has been ‘phenomenal’ across Winkworth offices.
Simon Agace, non-executive Chairman of Winkworth Franchising Ltd, says: ‘In its bid to stem inflation by increasing interest rates again the Bank of England has also fired a warning shot to speculators that property prices can’t go on rising forever. This quarter point rise should encourage those that have been holding back from selling - in order to achieve even higher capital gains - to make their move now in case they lose out to a less dynamic market in the future. It will, therefore, bring more stock to the supply-starved market, which has until now been distorted by an acute supply/demand imbalance, which started in London and spread outwards last year.’
‘It is important to remember that the increased cost of London living, due to congestion charging, general prices and taxation, together with higher mortgage rates when fixed rate terms eventually expire, will eventually reduce peoples’ disposable incomes and make people think again about living in the Capital.’
London is in danger of becoming a victim of its own success as living costs rise. Read full article.
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