On the Horizon: What the Property Industry's Response to Interest Rates Means for Sellers.

Published: 23/03/2024

The recent decision by the Bank of England to maintain the current interest rate at 5.25% has sparked reactions across the property industry. Despite a decline in inflation, which dropped to 3.4% in February from 4% the previous month, policymakers opted to keep rates steady. This decision, reached by the Monetary Policy Committee with a majority vote of 8-1, reflects cautious optimism about the economy's trajectory.

Bank of England Governor Andrew Bailey emphasized that while there are encouraging signs of inflation easing, it's not yet the time to consider rate cuts. He cited the need for assurance that inflation will consistently hover around the 2% target before contemplating any adjustments. Despite this stance, there's a palpable sense of momentum building towards a potential rate reduction in the near future.

For the property market, this decision signals stability and could bolster confidence among buyers and sellers alike. The absence of any votes for a rate increase marks a departure from previous meetings and aligns with the lowest inflation rate recorded in over two years. Such indicators suggest that the Bank may be gearing up to stimulate economic activity through a base rate cut, a prospect that bodes well for the housing sector.

These developments come amidst a backdrop of robust activity in the housing market. Data analysis from TwentyCI reveals a notable uptick in sales agreed during the initial eight weeks of the year, with a 31% increase compared to the same period last year. Moreover, recent surveys, such as the RICS survey, underscore growing optimism, with positive trends observed in both buyer enquiries and sales instructions for consecutive months.

In light of these encouraging trends, potential sellers can take comfort in the buoyancy of the current market. At Castle Hill Properties, we've observed a surge in viewings, offers, and overall buyer confidence. This indicates a favourable environment for those considering listing their property. As the market continues to show resilience and adaptability, now may be an opportune time to capitalize on favourable conditions and achieve your property goals with confidence.