Interest rate hikes hurt house prices
Wednesday, 28th March 2007According to figures from Nationwide the UK biggest building society said prices were only up 0.4% in March compared with a 0.6% rise in February. The rate of annual house price inflation fell from 10.2% last month to 9.3% this time around.
These figures emerged after Mervyn King the Bank of England Governor acknowledged signs that booming property prices were slowing, but said interest rates may still have to rise to keep a lid on inflation.
This is bad news for homeowners who have not fixed their mortgage rates as their monthly payments could increase again as interest rates could rise. This could lead to mortgage arrears as the monthly payments become less affordable.
House prices could also be affected as buyers become more reluctant to buy as the repayments on new mortgages will reflect the current interest rate levels. Less willing buyers will create a stagnant market and could ultimately lead to prices falling. Many estate agents are already being offered well below the current asking prices.
Some agents report typical offers being about 10% below the advertised price, indicating that the current property market is indeed very much of a buyers market. Sellers may have to drop prices significantly to achieve a quick house sale. Selling through an estate agents should get the sellers the best price, but to some homeowners who need a quick house sale this is the longerst option in a slow market.
If you are in need of a quick house sale then you can contact Soda Estates. We will provide you with a no obligation valuation and offer. A sale to us will be quick and without any expensive legal, survey or estate agents fees.