By Legal Futures Associate Search Acumen
The latest announcement from Bank of England, published at 12pm, announce an increase of 0.5% to 4%.
This decision has been made as pressures increase on mortgage payers and businesses, who are fighting against inflationary increases and struggling to pay off loans. Rates are now at the highest they have been since the financial crisis, in October 2008.
Andy Sommerville, Director at Search Acumen, commenting on the announcement says:
“With interest rates now at their highest level since 2008, the rising cost of borrowing is significantly shifting the dynamics of the commercial and residential property markets. New Bank of England data shows mortgage approvals have fallen by 23% and we saw 8% decline in commercial transaction volumes through 2022, as the increased cost of capital put pressure on investors, ultimately kick starting a period of price correction across most sectors. Today’s rates increase will extend this period of market correction as property owners and investors have to contemplate rising costs, the impacts of persistently high inflation on occupier demand, and the prospect of declining valuations.
“While transaction volumes may well decline further through this period of adjustment, there’s unlikely to be a corresponding moment of calm for property professionals as the pressure to drive efficiencies in due diligence becomes even more acute in a challenging market. In times of turbulence, innovation and game changing technologies, like AI, automation and digital data, is always a determining factor in companies’ ability to drive these efficiencies, deliver better advice and make better decisions.”