Interest rates are on the tip of everyone’s tongue, especially when it comes to buying and selling property. However, just what does this mean for the property market and more importantly how can it help you as a buyer or seller?
In simple words, the rate at which you can borrow money is determined using interest rates. The lower mortgage rate allows for more affordable mortgages and encourages people to buy homes. This spike in demand can cause property prices to rise, which is a boon for sellers. On the other hand this means lower monthly payments and often lending qualifications become easier, especially if you are a buyer that then enables your dream home.
But when interest rates go up, the opposite can occur. When interest rates are high, then mortgage repayments will be on the higher side. Should the growth in property prices outstrip wage level inflation, it means fewer people will be able to afford a new home which can help mitigate demand leading (in certain cases) to cause an easing or even decline of the property market. Sellers may suffer more days without an offer and buyers likely have to reduce their expectations of lifestyle or cost.
It is also especially crucial to note that interest rates can affect investor activity, rental yields and the type of mortgages available too. For Gloucester Estate Agents, visit mwea.co.uk/
It’s important to follow the trends in interest rates as well. Discuss with a mortgage advisor what the changes could mean for your plans and when you see an attractive rate be ready to move quickly.
In short, interest rates have a large influence on the property market and being familiar with them can enable you to make better and more assertive decisions.
