UK Housing Market Shrugs Off Interest Rate Rise
Residential property values in the UK accelerated between August and November, rising by an annual 4.5 per cent, up from 2 per cent in July.
The pick-up in prices came ahead of the Bank of England’s decision to double interest rates from 0.25 per cent to 0.5 per cent on 2 November – the first rise in more than a decade.
Yet experts believe that the move will have little impact on property demand. “We do not anticipate the Base Rate rise will be a barrier to buying a house,” said Russell Galley, managing director at Halifax Community Bank, citing the scarcity of homes for sale and strong employment figures.
Some argue that uncertainty surrounding the UK’s withdrawal from the European Union may affect economic confidence, but housebuilders have been increasingly active according to a new report from Reuters. British construction companies applied to build more new homes during the three months to the end of September than at any time in the past 10 years.
“This is positive news for the industry and prospective homebuyers, particularly in the light of the current political and economic uncertainties,” said Steve Wood, chief executive of the National House-Building Council (NHBC).
The report noted that the largest rise in house-building registrations was in Scotland, followed by northeast and Central England, and in Wales.