Latest Property News - Interest Rates

Thursday 20 April 2023

Some people who want to invest in property are holding off due to the increased interest rates.

We delved deeper & found some really interesting information that we wanted to share with you.

Have a look at this graph from the Bank of England showing the monthly interest rate of UK monetary financial institutions (excl. Central Bank) sterling 2 year (75% LTV) fixed rate mortgage to households from 2000 to March 2023.

Bank Of England Graph: Interest Rates

By the looks of this, we had all got so used to the rates being sub 2% that this sudden jump in interest rates scared a lot of us off investing in property, forgetting that this was a pretty standard rate a few years back.

Another obvious positive to point out is that steep cliff edge of rates continuing to come down from Dec 2022. At the tip of the ‘cliff’ last year the % was 5.99% & as it stands in March 2023 the rate’s 4.76%.

Pre-2000’s rates were consistently above 5.99% & the average % was more like 7.5%.

As a summary from doing this research the key take away is that by holding off investing, people are actually losing out on a lot of ££££’s as properties are still increasing in price. The longer you continue to put off investing because ‘interest rates are too high’, the higher the price properties become. For that extra few hundred pounds a month in mortgage interest now, you’ll most likely gain all of that back (and then some) by purchasing now when the property is likely to be cheaper.

If you’re interested in having a look at the graph yourself (it’s an interactive image, so it’s fun to have a look month by month through the various years what the rate was) click here.

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