How are interest rates impacting the UK property market?

There is no denying that the close of 2022 was a disruptive period for the UK property market. Following the somewhat baffling mini budget garnered from Liz Truss misfiring leadership team, we watched mortgage rates shoot up, along with the cancellation of a large number of recently agreed fixed term mortgage contracts. Given this, many people have been speculating about how it will impact UK property, particularly if it is a wise idea to keep investing.

On the surface, it would seem that rising mortgage rates and a probable decline in home prices would be detrimental to investors. Having said which, it becomes obvious that the situation is actually much more promising when you take a closer look. Housing prices are still at record highs, and demand is skyrocketing. The availability of new mortgages may be affected by higher interest rates, but this creates additional options for cash purchasers who may act more quickly and receive better deals by avoiding this interest increase.

It is reasonable to suggest that some consumers may be turned off by the rising cost of living and the previously mentioned high interest rates on mortgages. Many people are experiencing harder times right now, and some investors may experience stricter regulations that limit how quickly their portfolios can increase.

As previously indicated, this creates an opportunity for cash purchasers to profit since they won't have to worry about rising mortgage rates. Off-plan property is now a more valuable asset than ever before because of this.

House price declines have been discussed, it is true, but, as with everything else, this information must be viewed in its proper context. Instead of flatlining, it frequently just implies that property values are increasing a little more slowly than they were. Given that we have been growing at historically high rates, a minor correction is not the end of the world and may potentially help the market in the long run, which would benefit investors.

The UK housing market's future is difficult to predict with precision as we reach the end of the first quarter. The return of interest rates to below 6% may be an indication that things are beginning to settle again. At this time, investors looking to build health equity will see the key benefits to off-plan property, and with the North West region offering the most potential, selecting a property in the Northern Power House does feel like a good current option.