Prime real estate and property markets in the United Kingdom (UK) will not really be impacted by the increase in rates of interest as per experts. The Bank of England has hiked its rates to 0.75% and studies state that UK’s prime real estate micro-markets will not really feel the pinch of the hike although mortgage borrowers will feel this in case they have variable rates of interest since their monthly repayments will also increase in turn.
The benchmark interest rate has been increased to 0.75% by the Bank of England which is the highest such rate in over a decade. Mortgage interest rates are also expected to increase soon after this decision. However, demand is expected to be strong for luxury properties in the UK since a major chunk of buyers, particularly foreign buyers, prefer paying in cash. High net-worth buyers majorly pay in cash and are not likely to be bothered about bank rate changes according to reports.
In a short-term scenario, some buyers who have variable mortgage rates could feel the pinch or even those with tracker rates, i.e. those kept at a particular percentage above the benchmark rates. Their costs of repayment will increase soon. Those who have fixed rate mortgages will not be worried at all according to experts. The United Kingdom presently has in excess of 3.5 million mortgages in the residential category according to studies which are tied to tracker/variable rates. The average variable rate is 4.72% for a mortgage.
Those who have such mortgages may have to shell out around £17-18 extra each month or close to £200 on a yearly basis. This extra cost should not really be a major factor when it comes to attracting real estate buyers in the luxury segment and even in the mid-range and premium categories according to reports. In fact, the rise in interest rates clearly indicates growth in the Indian economy which could boost property markets hugely in the long run. Some of the major condominium projects in Toronto include 150 Pearl St. Condos, The Bread Company Condos and the Garden District Condos to name a few.
