UK Property Market

Interest Rates Go Up By 0.25 Percent

On May 10th 2007, the Bank of England announced an increase in interest rates from 5.25 percent to 5.5 percent. This change was foreseen by experts, as the property market witnessed three similar moves since August 2006.  However, the reactions of real estate institutions are varied.

At the moment, the rise is likely to have a serious influence on struggling regional markets, as well as on first-time buyers. According to the National Association of Estate Agents, the property prices will gradually attain a natural level, with no dramatic rises in the near future. The Royal Institution of Chartered Surveyors noted that more pressure will be put on first-time buyers because of the higher mortgage bills. In spite of this recent rise, estimations point that it is highly unlikely for the interest rates to see further increases.

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