The bank of England have announced that interest rates are to be held at 4.75%.
This weeks somewhat unexpected news that inflation had risen to an eight month high pretty much scuppered any hopes of a further fall in the base rate to give a pre Christmas boost for borrowers and homeowners.
The impact of the hard hitting budget is likely to take a little while to have an effect and economists have warned that pressure on prices could get worse before they get better and fall in line with the Bank of England’s target of 2% inflation.
Businesses are already beginning to pass on to consumers the various increases in costs, especially in relation to employment, which will make hitting that target even more difficult.
The impact on britains housing market remains to be seen but it is probable that with cost of borrowing still remaining relatively high it will be a little while yet before we see any sort of recovery.
If, and that is a huge IF, inflation can be brought back under control then we should hopefully see the base rate begin to fall as hoped but that could be unlikely until Q2 of 2025.
As ever, time will tell but finding the “new normal” is going to take a lot longer than any of us had hoped.
If you have a client looking for a new home or would like to talk to our vastly experienced Property Finding team in general, please feel free to contact us on 0333 577 0809 or at hello@plg.uk
PLG Consultants
19th December 2024
