On the face of it, news that interest rates in the UK are now at their lowest level since the founding of the Bank of England in 1694 is quite depressing, especially for those intending to save money.
But in the world of investment, some are effected positively, and some are effected negatively, and as is often true in life itself – where one door closes, another gate of opportunity swings open.
After being rooted at 0.5% since March 2009, on 4th August 2016, the base rate was slashed to just 0.25% by the Bank of England. So where does the opportunity come in, and who is it relevant to?
The answer is people wishing to achieve a quick house sale.
In a step which could dangle the carrot even further for prospective investors into the UK property market and potentially, eventually mean sellers have more chance to sell their house, Mark Carney, the current governor of the Bank of England, has even slated a drop to 0% as an eventual option. But Mr Carney did warn that negative rates are something he is keen on avoiding (to read more about this, click here).
What are the implications of the downward direction of interest rates for property sellers?
While there is no ignoring buyers less than strong demand since Brexit, sellers that set their prices more realistically could have more success in executing a quick house sale.
However, there is still a feeling in some quarters that buyer affordability has been stretched already, meaning those looking to move up on the property ladder will need to be consistently reassured that they are being offered a good value home that is suitable for them. That kind of reassurance and certainty isn’t yet reflected within the current market.
For those being tempted by low interest rate and who want to benefit from this, now is the ideal time to sell. Underlining and reflecting the positive on the current situation for buyers and sellers looking for a quick house sale is the recent study by property services firm Carter Jonas.
Their Head of Research, Darren Yates, detailed the following findings: “If the 0.25% interest rate cut is passed on to borrowers in full, someone with a typical 25 year tracker mortgage of £250,000 will see their monthly payment go down by over £30. Borrowers with greater mortgages will see even larger savings. Someone with a £500,000 mortgage could see a monthly saving of over £60, while those with a £750,000 mortgage will save over £90 per month – equivalent to over £1,000 per year.”
That’s not to say that rates will stay the same. It is without a doubt that rates will start to go up eventually, and when they do, it could be more expensive to borrow money than it is presently. This could mean a sharp fall in demand when it comes to selling and buying, and future uncertainty for mortgage holders.
The cash house sale option
For those wanting an immediate injection of cash, without the uncertainty and legal hurdles that the housing market often brings, there is the option to sell your house for cash, typically to a trusted property cash buyer. The swift depositing of funds into your account gives you capital you can use straight away and where demand is reportedly slow you can force through a sale of your property quickly, irrespective of the number of prospective buyers you have lined up.
Property owners should also note the fact that with every month they continue to hold out for the ‘perfect price’, they could be continuing to make payments associated with upkeep of a property, including council tax, utility bills and repairs. There may also be debts that the property owner needs to pay in order to get their finances in order. For this purpose, a quick house sale can provide an unmissable opportunity to get back on track with one swift transaction, allowing you to refocus on other areas of your life.
While those selling on to the traditional market might be affected by the uncertainty of when they are moving property, making an instant cash sale means that the seller takes control of their move date. They are also guaranteed a sale, no matter what state the market is in. It is a hassle-free option which has proved popular during these current uncertain times with those that don’t want to wait around in order to take their next step.
My Name is Mark King and I have over 20 years of experience within the property industry. Due to my knowledge and expertise, I can offer accurate advise on what your home is worth on today’s market, and I can offer a free valuation click here .