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Unfortunately, interest rates rose for the third time again this year. But, despite how shocking inflation rates are, here at Austin Homes, we are happy to let you know why it is still the right time to buy property despite common concerns.
Austin Homes has some of London’s most desirable properties for sale.
Primarily, we can begin to look at what inflation means. Specifically, inflation is the rate of price increase over a certain period. Inflation is typically a broad continuum of measures that looks at things such as the overall increase in prices and, by extension the increase in the cost of living in a country. The inflation rate is currently 9.4% in the UK which is 7.4% higher than the target of 2%. It has remained relatively stable at 2% over the last 20 years with intermittent periods of rising and falling, yet this is the most it has grown since 1995. Ideally, a low and stable inflation rate creates a healthy economic environment. In contrast, high and unstable inflation rates create a harmful environment whereby prices become unpredictable. Consequently, it is difficult for people to plan what to save, spend or invest.
Multiple factors contribute to the current high inflation rates, such as the rise in energy bills as a direct result of high oil and gas prices. Furthermore, petrol and diesel prices have risen, and food prices have risen due to the war in Ukraine. Overall this contributes to the increase in the cost of living.
Despite interest rate rises, it’s still normally cheaper to buy than rent in London.
From Austin Homes point of view, we are encouraging people that it is still an excellent time to buy in London. This is because, despite the interest rate increases, it remains lower than in the ’90s (which was a 14% interest rate on the mortgage). Therefore a mortgage payment is currently cheaper than a rental payment due to the rise in rent prices.
Austin Hayes, a Director from Austin Homes, explains, "An increasing interest rate environment is far from ideal, and today's .05, the largest since 1995 in one session, is a point of consideration. That said, we have several environmental matters that will keep the residential market in London strong and stable; In the rental market, I would expect to see inflationary based increases, and this is arguably beneficial to the private rental sector, and private landlords, which have been vanishing post-George Osbourne and subsequent UK Chancellor attacks, with calm nerves and some sensible changes in Eastern Europe matters could settle, and this was arguably a real-world realignment".
ABOUT LONDON’S LEADING LETTING AGENT, AUSTIN HOMES
Austin Homes is a leading light in London lettings and sales space. They are priding themselves on delivering a unique and bespoke service hinged on expert local knowledge and a passion for the communities they serve. With a focus on East London’s Shoreditch and Hoxton areas, Austin Homes is pleased to sell and rent some of London’s finest properties, offering a bespoke service and outstanding results.
Miss. Claire White
W. Why Media
E. claire@whymedia.com