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What does a new Prime Minister mean for the housing market outlook?
The turbulence of the last few months in the hallowed halls of the palace of Westminster have been well documented, and we can see the results in our back pockets with the highest interest rates in decades, and a level of uncertainty usually reserved for so called developing economies.
A new month, a new dawn as Rishi Sunak becomes the third Prime Minister this year. For many, this is heralded with a great sigh of relief.
What does all this mean for my mortgage?
The new prime minister seems to have gone down well in financial markets after the disastrous mini budget was reversed by new Chancellor Jeremy Hunt. The priority must be to put the country’s finances in order to help bring down borrowing to help tackle the cost-of-living squeeze. The health of the housing market is closely linked to the economy and in particular the cost of mortgages, which have increased to over 6% in recent weeks.
Will mortgage rates fall?
The cost of borrowing for government and business has fallen in the last few weeks and is set to fall further in the weeks ahead, as markets react to the messaging from the Government about balancing the books.
We don’t know how much The Bank of England will have to increase base rates to stabilise inflation, however there is hope that we are approaching the end of interest rate increases. This is good news for savers after a decade of low returns on savings, but means buying a home has become more expensive.
It looks like mortgage rates may reduce to four to five percent in the new year. But anyone looking to buy a home needs to realise that we are not going back to the days of cheap borrowing any time soon.
What does that mean for me as a seller and buyer?
The housing market situation of high demand and low supply remains. This means that if the economy now calms, buyers are still out there looking to buy a new home. It is wise for buyers not to overstretch themselves when buying, and to look out for the best mortgages, fixing them to achieve stability in the security of knowing their mortgage outgoings over the coming years.
Putting your home on the market at the right price, while making it as attractive as possible to buyers will put you in a good position to maximise your return. It is important to get the best estate agent, with local knowledge and expertise to make the most of your sale, an estate agent who will be on your side and fight for the best result. At Phillips George we pride ourselves on our excellent reputation and the great results we achieve for our clients.
Get in touch with Phillips George to see how we can support you to make the most of your property sale.