Hot Property News – August 2024

Well, the school holidays are nearly over so the roads will return to mayhem in the mornings and public transport will struggle to cope but we have a new Government, inflation is falling, there has been a reduction in the Bank of England base rate to 5% after a .25% reduction on the 25th July, the first fall since March 2020 so perhaps things are going to get better? Then alarm bells start ringing after the Prime Minister Sir Keir Starmer delivered a gloomy warning that the Autumn Budget set for the 30th October would be tough, this just 3 days after the clocks go back - are we going to be plunged into darkness both metaphorically and literally and what does it mean for the housing market?

I think we need to wait and see. I suspect that there will be another small interest rate cut before the end of the year, mortgage lenders have been reasonably quick to share the rate cut with borrowers but they had also inflated their rates in June to accommodate a rate cut but maintain their margins so the first sign to look out for is when the banks slightly increase their rates again in anticipation of another Bank of England base rate cut. 

I've had a good look around, these are the best mortgage deals I could find and are certainly encouraging with no real prospect of rates increasing in the forseeable future.

Purchase - 40% deposit – 5 years fixed @ 3.81% (-) with 5 x income multiplier

 

Purchase & remortgage – 25% deposit – 5 years fixed @ 3.99% (-) with 4.5 x income multiplier

 

Purchase - 10% deposit – 5 years fixed @ 4.59% (-) with 4.5 x income multiplier

 

Buy to Let – 25% deposit – 1 year fixed @ 3.49% (-) (Based on rental income)

There is noticeably more activity in both the London residential sales and lettings markets, confidence is returning as interest rates start to reduce in the sales market and the rate of increase in rents has slowed considerably to a more sustainable level.

I for one have never expected to be any better off following a budget and I see no reason to expect that to change but if we can continue along the road to economic recovery I see no need for pessimism and I think we have every reason to be quietly confident and I would love to hear from you with your views.

Kind regards

Graham McKee MNAEA MARLA

Managing Director