Zero or negative % rates now probable

Posted: 12/10/2020

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The Bank of England have indicated that they may go to zero or even negative interest rates. So what will this mean for the property market? Well, it's unlikely that lenders will offer zero % mortgages, but it should mean particularly low rates, possibly under 1%. To put that into context, a £100,000 mortgage would cost just £83 per month in interest only, that's excluding capital repayments and any charges of course. This makes residential property much more affordable, and higher priced property more attainable. This generally leads to an upward trend in prices, although other factors will feed into this, such as the Covid/Brexit economy landscape. Those with money in the bank will start to look for better places for their cash, as banks pay either no interest, or start to charge customers to keep their savings. And that will drive investors to the property market. More demand usually means upward trends in prices. So we could see prices climbing, pushed up by both residential and investment buyers. If you are interested in buying, at Key One we are experts in residential investment property, and are happy to give free advice. Our lettings and management service is low priced and VAT free. If you are thinking of selling, we only charge 0.5%. 

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