Speaking in response to the announcement made today by the Bank of England that interest rates will rise for the first time in a decade to 0.5%, David Westgate, Group Chief Executive at Andrews Property Group, said:
"The Bank of England’s announcement today should come as no surprise. This has been mooted for a while now and, in my opinion, is actually long overdue.
In the aftermath of the financial crisis, it made sense that rates should be kept low in order to drive activity in the market. That was, however, 10 years ago and the time is now right to start readdressing rates. Given that this is a relatively small increase in the base rate, its impact to most borrowers should be nominal and, assuming they have planned appropriately, relatively easy to adapt to.
What the industry needs to ensure, however, is that it works to stem any knock to confidence amongst consumers that this announcement brings. Simply hearing news of a rate increase will lead some people to reconsider their financial and property decisions and whilst this is understandable in some respects, these decisions should only ever be made based on personal circumstances and with at least a medium, if not long, term view.
When taken in this context, today’s 0.25% rate increase should not have any impact on the property market.”
