Following some expectations that there could have been a rise in interest rates, the Bank of England’s decision to hold the base interest rate at a record-low of 0.1 per cent has been welcomed as a “confidence booster” for the property sector by estate agency membership body Propertymark.
The Monetary Policy Committee (MPC) maintained the current base rate – which it introduced in response to the pandemic last March – following a unanimous vote last week.
The decision comes as the end of the SDLT holiday looms on 30th September and there is talk of a drop in listings in September, which will have a knock effect on the property market in 2022.
Nathan Emerson, Chief Executive at Propertymark, said:
“Keeping the base rate unchanged at a record low of 0.1 per cent is welcome news for the sector.
“It will be a confidence booster for buyers with mortgage and borrowing rates remaining low, and should therefore help to sustain a busy market for sellers and agents – particularly as the last remaining tax holiday deadline looms.
“Continuing to encourage movement within the sector is positive for the wider UK economy, and while the long-term forecast remains unclear, the MPC’s decision should alleviate fears in the short term.”
The news comes after the Consumer Prices Index (CPI) rose to 3.2% for the 12-months to August, up from the 2% in July.
Inflation is expected to climb to 4% by the winter in part due to rising energy prices, but the MPC agreed that this was likely to prove a “transitory” departure from the 2% target, with an expectation it will return on track in the medium term.
In his correspondence to the Chancellor of the Exchequer, Bank of England Governor Andrew Bailey contended that the particularly low inflation rates of last year in part explain the comparatively high rate announced this month.
