RU
DE
FR
ES
PT
AR
The Bank of England has cut the mortgage rate from 5.25% to 4.75% throughout 2024. According to Mansion Global, this change is likely to significantly impact the middle and economy segments of the property market and the luxury housing sector.
Experts say that while buyers of expensive property are generally less affected by interest rate fluctuations, they cannot completely ignore the changes. Those investors who have the means to buy luxury property for cash often prefer to use mortgages as a sound investment strategy.
Overall, such changes could send a positive signal to overseas investors and, as a result, ‘will lift sentiment in the luxury property market going forward,’ said Mark Parkinson, managing director of London-based property consultant Middleton Advisors.
However, the forecasts show a positive trend, suggesting the base rate will fall from 4.75% to 3.75% by the end of 2025. Banks and construction companies are also expected to increase mortgage financing by 11% due to improved credit conditions and rising real incomes.
However, related risks remain: for example, the recent rise in annual inflation to 2.6% is a cause for concern. Inflation is expected to remain above the Bank of England's 2% target through 2025 and will slow down rate cuts.
Another risk is that Great Britain's weak economic growth could lead to lower tax revenues. If this happens, the government may have to raise taxes again or resort to additional borrowing, leading to a rise in the key rate.
Comments