Bank of England Raise Interest Rates to 5.25%
03 August 2023
The Bank of England has once again decided to raise interest rates, making it the 14th consecutive time they have taken this action. The recent announcement of a 0.25% increase has now brought the base rate to 5.25%, reaching its highest level since April 2008. This rise, although in line with expectations, is less than June’s 0.5% increase. Interestingly, this move comes after the news of a significant drop in inflation for the month of June, which fell well below expectations, reaching a level of 7.9%, the lowest it has been in over a year.
In their announcement, The Bank of England stated, "The MPC will ensure that Bank Rate is sufficiently restrictive for sufficiently long to return inflation to the 2% target sustainably in the medium term, in line with its remit."
The latest interest rate rise will directly impact homeowners on tracker rates. However, for those looking to remortgage or take out a new mortgage, the impact may be minimal, as many lenders had already factored in a 0.25% increase in the weeks leading up to today's announcement.
The implications of this latest rate hike on the local property market remains uncertain. However, in areas such as Dundee, Angus, and North Fife, the property market has shown resilience despite the recent surge in interest rates. According to our April-June 2023 House Price Report, sales volumes have declined, but the average selling price has remained stable. Notably, over 76% of sellers in the region who are selling with a TSPC solicitor estate agent are securing a price equal to or higher than the Home Report value, with the current average premium standing at 101.8%. These positive trends demonstrate the continued strength and stability of the property market in these areas.
Lynne Hill, Manager at TSPC said: “In the current economic climate, the importance of adopting a well-informed approach when entering the property market cannot be emphasised enough. With such extensive knowledge, there is no one better equipped to guide you on your next move than a TSPC solicitor estate agent.
“Our member solicitor estate agents are deeply immersed in the market on a daily basis, equipping them with unparalleled knowledge of local intricacies and how they influence the specific requirements of buyers and sellers alike, whether in property sales or assisting clients with property offers."