BREAKING PROPERTY NEWS – 19/10/2021

Estate Agent Networking Breaking News

Daily bite-sized proptech and real estate news in partnership with Proptech-X. Today, Stanton looks at the Bank of England interest rate, the post-budget housing market, and Rightmove’s October House Price Index.

 

Interest rate rise forecast before Christmas

Will Andrew Bailey, the Governor of the Bank of England raise its lending rate from 0.1%? The smart money is unfortunately saying yes. And it might be this side of sitting down and eating our turkeys at Christmas. That is if the supply chain holds up and there are enough to go around.

Mr Bailey has gone on the record recently to say, “monetary policy cannot solve supply-side problems but it will have to act and must do so if we see a risk, particularly to medium-term inflation and to medium-term inflation expectations.” In other words, to stem inflation they are raising the interest rate.

The Financial Times reported that: “A majority of people trading on the overnight index swap market, which foreshadows the BoE’s interest rate, expect the first rise from 0.1 per cent to 0.25 per cent at this year’s December meeting.”

A more explicit indicator of what is really going on is to look to the bond market, where two-year bonds spiked in value. This is a sign that borrowers are going to be paying more for their borrowing in the near future.

The biggest lever that stops the housing market has always been market sentiment focused on the cost of borrowing. If mortgage interest rates climb, fewer people buy property. The other outcome is that often the relative value of property drops.

In 1988, two million properties in the UK changed hands, super-charged by the Chancellor of the Exchequer announcing that a tax loophole MIRAS was closing in September 1988, causing a massive surge of activity in the housing market.

Then, almost overnight, the next four years saw a moribund housing market with house prices dropping by over 20% in 1989.

Now, in 2021, an entirely different Chancellor of the Exchequer has created yet another super hot property market by tampering with the SDLT mechanism. With a hard stop date at the end of September, no less than three weeks later it looks like interest rates may well rise.

The next big date for the housing market is the 27th of October, the day that Rishi Sunak unveils his budget. It may well be the most significant budget given by any Chancellor in recent times. For my part, I just hope that he realises what his actions have done so far, and the downside to a slow or non-functioning housing market.

After all, there isn’t much point chanting “build back better” and making claims that 300,000 new homes a year will be built under this Conservative government in the levelling up process if no one is going to buy them. The cost of mortgages is simply too high and sale prices are becoming retrograde.

 

Save the date: Rishi Sunak’s budget will be announced on the 27th of October.

Rightmove reports bumper housing market, but for how long?
For two decades I have read with heightened interest the detailed analyses put forth by Rightmove, the UK’s largest real estate portal, which has a huge amount of data given the volume of inventory processed on the site.

Despite the vast wealth of data, it’s always disappointing that Rightmove’s observations are a retrospective review, rather than a prophetic look forward. Regardless, the overview can make for an interesting read.

For those unfamiliar with its overview, it is freely available at the base of the Rightmove landing page each month in the House Price Index section. I’m intrigued to see if interest rates rise and if the steam does come out of the housing market.

The Rightmove index for October seems to be betting the other way.

Andrew Stanton

CEO & Founder Proptech-PR. Proptech Real Estate Influencer, Executive Editor of Estate Agent Networking. Leading PR consultancy in Proptech & Real Estate. Want to contact me directly regarding one of my articles or maybe you'd like a chat about future articles? Email me via editor@stagingsite.estateagentnetworking.co.uk

You May Also Enjoy

Breaking News

Freehold and Leasehold Reform Act-lessees can control their own destiny

Matthew Pennycock, Minister of State for Housing and Planning, has made a Parliamentary Statement regarding the future progress of the Freehold and Leasehold Reform Act 2024. The Government have formally recognised the “significant complexity of the task” and that the legislation was rushed in at the end of the last parliament and as a result…
Read More
Rightmove logo
Breaking News

Rightmove’s weekly mortgage tracker 22/11/24

The current average asking price of a typical first-time buyer property is £225,340. For someone taking out an average five-year fixed, 85% LTV mortgage, the average monthly mortgage repayment on this type of home is now £1,104 per month if repaying over 25 years, compared with £1,138 per month a year ago (when the average first-time buyer property asking price was…
Read More
Estate Agent Talk

The Architecture Of Attention Behind Social Media Addiction

In the digital age, social media platforms have revolutionized how we connect, share, and consume information. Behind their sleek interfaces lies a sophisticated architecture of persuasive technology.  These platforms employ intricate design patterns and technical elements to capture and hold user attention. From subtle visual cues to complex algorithmic systems, every feature serves a calculated…
Read More
Breaking News

2025 Predictions for the Private Rental Sector

Allison Thompson, National Lettings Managing Director, Leaders Romans Group (LRG) “As we approach 2025, the lettings industry is entering a phase marked by stabilisation and opportunity. Rental inflation has slowed to an average of 3-4% for new lets, reflecting the effects of affordability constraints; renters’ budgets are beginning to limit how much rents can rise.…
Read More
Breaking News

Response to Matthew Pennycook’s Statement on Leasehold Reform

Yesterday, Secretary of State Matthew Pennycook made a Ministerial Statement on the future of leasehold reform. Responding, Mark Chick, director of ALEP and a Partner at Bishop & Sewell LLP said: ALEP welcomes the ministerial statement which puts in place a timeframe and some objectives for the implementation of the Leasehold & Freehold Reform Act.…
Read More
Estate Agent Talk

Essential Garage Storage Solutions for Small Spaces

Maximize your garage space with practical storage ideas that keep your items organized and accessible. If you’re dealing with a smaller garage, smart solutions can make a big difference in keeping your space neat and usable. 1.  Wall-Mounted Storage Wall-mounted storage is an excellent way to save space and keep your garage organized, especially in…
Read More