Thats the news from the Bank of England governor, Mark Carney. In a speech given at Queen Mary University of London earlier this month, Mr Carney gave a gloomy interpretation to the World economy and indicated that interest rates would remain at the same level for some time to come.
He said that the collapsing oil prices and “unforgiving” global economy meant that tighter monetary policy was not necessary. Many economists are now predicting that rates will remain the same throughout 2016, and possibly well into 2017. That’s great news for mortgage holders, but we hear “growns” from savers!
In the speech, Mr Carney said “it is clear to me that since last summer, progress has been insufficient to warrant a tightening of monetary policy. The world is weaker, and UK growth has slowed. The uncertainty and volatility in China, the collapse of oil prices and sluggish pay growth the in UK means that interest rate rises will be delayed”.
Last summer, the Bank of England’s Monetary Policy Committee came under pressure to raise interest rates after Janet Yellen, the chairwoman of the American Federal Reserve announced a small increase in rates, the first since their financial crisis. Interestingly, at that time, Mr Carney dismissed these pressures and suggestions, saying that America had higher costs pressure on inflation than the UK, and that the British economy was more exposed to the global slow down in growth.
What does this mean for the housing market in 2016? In simple terms, there’s no change! House prices will continue to increase unless supply increases. Will more people look to sell in 2016?
I think the answer to that question could well be YES. Chancellor George Osbourne announced tax changes and increased Stamp Duty for Investors. The Buy to Let market could well be hugely effected this year – but that’s a discussion for another time.
I strongly believe that more home owners this year will say “Lets move upmarket”. With low mortgage rates, the opportunity to buy a larger home at affordable monthly repayments will be too tempting, and a higher proportion of people to sell and move up market than in previous years. This in turn will create more supply, so helping slow property price rises, making it even more attractive and affordable to move to a bigger home.
We are just at the end of week three in 2016, but already I can report more valuations than at this time last year, the majority of those appointments are from families moving up market. The other reason is the age old question of school catchment areas. But rather than moving to similar size properties, they are considering larger mortgages and bigger homes.
Is it time to make your move up market and book your free valuation and Moving Meeting