The August rise in interest rates has cooled the interest of those looking to move house. A survey by AA Financial Services revealed that just 6 percent of UK adults planned to move after the Bank of England raised its base interest rate to 0.75 percent, only the second rise in a decade.
The AA has been monitoring the intentions of those intending to buy or sell throughout 2018, and the figure had remained steady at 8 percent until the rate rise prompted mortgage lenders to raise their rates in return.
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Interest rate rise shapes people’s plans
David Searl, managing director of AA Financial Services, said: “Whilst many look at house prices, we are interested in looking at people’s plans to move in the future, what drives the decisions on when and where to move.
“Our July data painted a positive picture for August and September, and following the rate rise, we wanted to get a sense on whether external events such as these shaped people’s thinking and plans.
“On the evidence of what we have seen, it looks like there was an immediate impact. Whether this is a short-term reaction or not is too early to tell, but we would expect to see more people reacting to uncertainty by putting plans on hold.
“The key issue for many now is not so much house price trends but the cost of borrowing. It is now a time for those moving home to shop around for a mortgage deal that works for them and is sustainable in the longer term.”
Ideal position to take advantage
While the slight increase in mortgage lending rates will undoubtedly inhibit some potential buyers from making a move, those in a strong financial situation are ideally positioned to take advantage.
Although there are fewer properties than in previous years on what the Royal Institution of Chartered Surveyors describes as a “flat market”, anyone with the right deposit and their mortgage offer in place could secure an excellent price because of lack of competition from other buyers and because UK housing prices are reported to be rising at their slowest rate since March 2013.
Savvy home buyers ready to take advantage of the current housing market can also arrange the ideal conveyancing services they require through Homeward Legal. We offer, through our nationwide panel of expert property lawyers, high-quality but low-cost conveyancing tailored to your needs. Talk to our team now on 0800 038 6699 to find out how we can help.