SUSSEX LIFE MARKET UPDATE
Tim Page-Ratcliff provides an update on the residential property market and advice to those planning a move
RATES ARE KEY FOR THE REST OF 2024
May 2024​
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Inflation dropped to 3.4% in February, down from 4% in January, signalling the property market might start to benefit from a cut in the base rate.
Finally, the Government’s inflation target of 2% is in sight. While the Bank of England voted in March to keep interest rates at 5.25%, money markets are now betting on three 0.25% cuts before end of the year, with the first of these anticipated in May or June. When it comes, it will be warmly welcomed by all those involved in the residential property market.
House buyers are sellers will benefit from the good news. More confidence in the market will bring more buyers, sellers will be able to plan ahead with more certainty and buyers will benefit from more competitive mortgage rates. With house prices expected to increase by 3% in 2024/25 and then by 4% in 2026, the market continues to be highly price sensitive and is likely to continue in the same vein for some time, especially as there are still many buyers coming off sub 2% mortgage deals and facing higher borrowing costs. Once the Bank of England’s Monetary Policy Committee votes to cut the base rate, which could now be sooner than was realistically expected earlier in the year, we should see it being reflected in increased transaction numbers.
As always, there is a caveat to the speculation. Ongoing conflict in the Middle East and in Ukraine, and disruption to one of the world’s busiest shipping lanes in the Red Sea, threatens prices surging once again and inflation rising as a result, so we are by no means out of the woods. However, better-than-expected recent economic data is more encouraging and is already beginning to provide a much needed stimulus to the property market.
The wellbeing of the residential property market has always relied heavily on feel good factor and confidence. A cut in interest rates will boost both and can’t come soon enough.
Now is a great time to engage a search agent. If you’re planning a move or would like some property related advice then please do get in touch.
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