No Move On Interest Rates
[lead]It’s been a while since our last blog and when we did a straw poll around the office, no one wanted to talk about serious things like interest rates. But, unfortunately we have to so, in our latest quick read, you get a bit more information about interest rates and why it’s not all as bad as it can seem.[/lead]
What’s happening with interest rates?
We’ve seen the interest rate reduce from 5.25% in July 2024 to the current rate of 4.25% in June, 2025. We’ve also seen the rate been cut by 3 base points in the last three financial quarters.
The latest interest rate decision – holding at 4.25% – may be a damper for home buyers and those remortgaging but it’s not all that bad.
Why did they hold the interest rate at 4.25%?
There are lots of reasons but if we’re being serious, there are some underlying economic things like the price of food and concerns of oil prices increasing with conflict in the middle east that have prompted this decision.
What the Bank of England hasn’t indicated is any rises – fingers crossed – to combat inflation.
Why do you say it’s not all bad news?
Mortgage deals for 3 and 5 year fixes have dropped below 3.5% in recent months which means that the lenders are dropping their rates in line with expectations and right now, these are good packages to take out.
But that’s not all. Speaking to lenders and brokers, the interest rate is just a piece of the puzzle that we are all navigating. This isn’t stopping people from buying homes whatsoever.
What’s happening in the Chester estate market?
At Carman Friend and generally around Chester, properties are selling more now than in the last two years, and there is more confidence in the market than in recent times.
We are seeing properties of all price ranges selling and selling quickly, too. So it’s not a market that is slowing down and not necessarily affected by the rates being stable. We saw rates like the ones we’re experiencing in the early 2000s until 2009, since then we had record low rates and it was unsustainable but of course, that doesn’t help when you have other costs.
The bigger point is that houses are selling in Chester and at Carman Friend we are up year on year in listings and sales. That’s not the most scientific measure, granted, but it does show that as Chester’s best performing estate agent for the last 5 years we know where the market is right now and if you’re thinking of selling, this rate decision shouldn’t stop you.
Will rates come down soon?
The next decision is in August and we will have to see what is happening in the economy by then. If we could predict rate cuts we would be spending more time playing the lottery than selling homes.