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The Bank of England has announced that it will reduce the Base Rate by 0.25%, to 4.75% this month – the second reduction this year. Base Rate was held in September after being reduced in August, which had been the first drop since 2020.
The Bank meets every six weeks to decide what should happen to interest rates. With the aim of keeping inflation to its target, and keeping the wider economy healthy. It was announced in October that inflation had fallen to 1.7%, which is below the 2% target the government sets for the Bank.
The markets had been widely predicting a cut to interest rates today, as continuing to hold rates may have a negative knock-on effect on businesses and households, further down the line.
What’s happened to mortgage rates recently?
We’ve seen mixed behaviour from lenders in recent weeks, with some increasing their mortgage rates, and some decreasing. This is largely because we’ve seen quite a bit of movement in swap rates – the underlying costs of mortgages to lenders – which has meant some have needed to reprice their products to bring themselves back in line with the rest of the mortgage market.
You can check the current average rates for a range of different deposit sizes here.
What do the experts think?
Our mortgage expert, Matt Smith, says: “This Base Rate decision comes at the end of a run of important macro-economic and political events on both sides of the Atlantic. All of this has resulted in a view that Base Rate will be cut at a more moderated pace than previously expected and has been priced in by lenders. Therefore we are likely to see average mortgage rates drift up a little in the short term, before starting to fall back again.”
“Today’s decision will probably help relieve pressure on lenders to increase rates as we had started to see. If the last few weeks has taught us anything, it is that the UK mortgage market remains competitive, but headline pricing will continue to be impacted by events both in the UK and overseas”, he adds.
What does the Base Rate reduction mean for my current mortgage?
Changes to the Bank’s Base Rate can impact how much interest you’ll pay on loans, including mortgages. If you’re on a fixed-rate deal, your monthly payments won’t change until the end of your deal. And if you’re on a tracker mortgage, or a variable rate mortgage that follows Base Rate changes, this month’s Base Rate reduction will mean your monthly payments will take on this drop.
If you’re coming to the end of your fixed-rate mortgage soon, you’ve probably already started to think about the rate you’ll be offered on your next deal.
If you’re thinking of moving home soon, a good way to find out how much you could borrow is to use a mortgage calculator. You can get a personalised result by applying for a Mortgage in Principle, which will take you one step closer to a mortgage offer.
In July 2023, the Mortgage Charter was launched to help those struggling to meet their monthly payments, as well as borrowers who are coming to an end of their fixed rates soon.
The Mortgage Charter encourages lenders to be flexible and offer borrowers the chance to lock in a new deal up to six months before their current rate ends. Of course, borrowers can also look at moving to another lender – commonly known as remortgaging – but this can take longer, as you have to go through a normal lending process, such as income checks, the legal process, and maybe a valuation of your home.
This all takes time, and you would want to make sure you’re looking around a few months before the end of your current deal to avoid falling onto your lender’s on to a Standard Variable Rate – which will cost more than the repayments you’d have made on a fixed rate mortgage. The current average for SVRs is 8.01%.
What could the Base Rate reduction mean for affordability?
Lenders’ ‘stress test’ calculations – which is how they calculate whether someone could afford a mortgage were their repayments to jump considerably – are directly linked to the Standard Variable Rates that we just talked about above.
The ‘stressed rate’ is usually the lender’s SVR, with at least 1% added on top. So, if lenders’ SVRs reduce in line with this Base Rate cut, we might start to see affordability improve, because the stressed amount will now be lower than if Base Rate was at 5%.
What could happen next?
The Bank of England’s Monetary Policy Committee meets every six weeks to discuss and vote on whether rates should go up or down, or stay the same.
History has shown that after interest rates have increased over time, they have remained flat before starting to come down. So while we’re now seeing the beginning of the downward curve, it’s extremely unlikely that rates will drop back to the historic lows we saw back in 2021.
After the Base Rate cut in August, the markets had been forecasting a potential two further cuts before the end of 2024. However, due to other global events which are outside the Bank’s control, this has now fallen back to just one cut, which we’ve seen today. So it’s unlikely we’ll see another cut before the end of the year.
We could see Base Rate fall to around 4% in 2025, which would mean three more Base Rate cuts throughout the next year. Though as always, this could change depending on what happens in the broader economic environment.
The next decision on interest rates will be announced at 12pm on 19 December 2024
Want to check how much your home is worth? You can get an Instant Valuation here.
If you would like to discuss selling your home, please get in touch with us This email address is being protected from spambots. You need JavaScript enabled to view it. or call any of our busy, helpful teams/offices:
Four Oaks 0121 323 3088
Sutton Coldfield 0121 321 2101
Walmley 0121 313 2888
Great Barr 0121 358 6222
Thank you for reading and your interest in Acres and our property for sale.
Nigel & Jayne Deekes – Acres Partners
Article curtesy of Rightmove : 7.11.24
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Chancellor Rachel Reeves has delivered her Autumn Budget: the first Labour Budget in 14 years.
Ongoing cost of living pressures are likely to have contributed to the large amount of coverage and speculation the Budget has received in recent weeks. Mortgage rates remain higher than in recent years, with household energy bills down from their 2022 peak.
Rightmove recently surveyed over 34,000 people to find out what they wanted to see from the new government. An overwhelming majority of renters (60%) said they wanted to see more support for first-time buyers, while simplifying the home-buying process was the most important thing for existing home-owners.
What changes were announced for housing in the Autumn Budget?
Housing announcements included £5 billion government investment to deliver Labour’s housing plan, with a £500 million boost to the Affordable Homes Programme. Investment is planned for sites across the country, such as Liverpool Central Docks, with 2,000 new homes and a transformation of the waterfront.
There will also be £25 million put towards the delivery of 3,000 energy-efficient new homes across the country, with a target of 100% of these being affordable.
Capital Gains Tax on residential property will remain unchanged.
The government has also pledged to engage with industry on plans to make the Mortgage Guarantee Scheme permanently available to support lending at 95% loan-to-value.
What’s happening with stamp duty?
There was no mention in today’s Budget of the extension to the current stamp duty relief for first-time buyers, which is due to end in March 2025.
Stamp duty is a form of tax paid to the government when buying property or land. And the amount buyers pay varies based on the cost of the property, and whether you’re buying a home to live in, or an additional home.
The stamp duty surcharge for those buying second homes, such as landlords buying properties to rent out, is set to rise by 2% from 31 October 2024, increasing from 3%, to 5%.
Our property expert, Tim Bannister, says: “Increasing stamp duty on additional home purchases means that, based on the average asking price for a home, a landlord could face an additional charge of more than £7,000 from tomorrow. In the short-term, some landlords may need to pause for thought, but in the longer-term we expect it becomes another charge that landlords become accustomed to considering.”
The previous Conservative government adjusted stamp duty thresholds until March 2025, which meant that home-movers would pay lower stamp duty fees, and in many cases (mostly for first-time buyers), meant no stamp duty to pay at all. There were no announcements around an extension to the current elevated thresholds, meaning these are set to drop back at the end of March 2025. Tim says: “With the rate at which no stamp duty is charged for home-movers due to fall from £250,000 to £125,000, anyone purchasing a property over this amount could face paying up to £2,500 more in stamp duty land tax. Meanwhile, the threshold rate at which first-time buyers do not pay stamp duty is likely to fall from £425,000 to £300,000. If a first-time buyer buys a property at the average UK price of £370,759 they will pay £3,538 in stamp duty from March 2025, compared with nothing now.”
“We may now see a rush of buyers, particularly those purchasing for the first time, either bringing their plans forward or trying to get their deal done before charges go up. It currently takes a lengthy 152 days on average to complete a property transaction once a sale is agreed, which would mean agreeing a deal tomorrow to complete on time. While this is an average and many will be hoping to complete more quickly, it highlights that those who are hoping to avoid higher charges will need to act quickly”, Tim adds.
The number of properties affected by the change in stamp duty thresholds varies by region. You can take a look at the percentage of homes currently free from stamp duty for people buying their first home, and how that will change after March 2025.
Capital Gains Tax remains unchanged
We saw some trends emerge in the housing market in the run up to the Budget, off the back of several anticipated changes. One of these talked-about changes was an increase to Capital Gains Tax, which could have seen landlords pay increased tax on any income made from rental properties.
Earlier this year we saw a record number of former rental homes for sale as some landlords made the decision to sell their properties as a result of the rumoured tax change, along with other additional costs for landlords that have grown over the years. However, today’s budget has confirmed that the current rates of Capital Gains Tax on residential property will remain unchanged.
What’s happening in the housing market right now?
We’ve seen strong levels of activity in the typically busy autumn season, and lots more people looking to get on with home moves than we saw in the more muted market of 2023. The number of sales agreed is up 29% compared to the same time last year, while the number of people sending enquiries to estate agents about homes for sale is up 17%. On top of that, buyers will also find more choice of homes, with the number of homes for sale up 12%.
While there’s lots of activity in the housing market, we did see lower-than-average growth in house prices this month (+0.3%), compared to the seasonal average of 1.3%. This shows that the market is still price sensitive, and sellers coming to market need to set a realistic asking price to find a buyer.
Want to check how much your home is worth? You can get an Instant Valuation here.
If you would like to discuss selling your home, please get in touch with us This email address is being protected from spambots. You need JavaScript enabled to view it. or call any of our busy, helpful teams/offices:
Four Oaks 0121 323 3088
Sutton Coldfield 0121 321 2101
Walmley 0121 313 2888
Great Barr 0121 358 6222
Thank you for reading and your interest in Acres and our property for sale.
Nigel & Jayne Deekes – Acres Partners
Article curtesy of Rightmove : 30.10.24
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Moving can be spooky, but with the choice of property available, and the back up of our first rate team Acres will remove the scary part of selling, or buying.
Four Oaks 0121 323 3088
Sutton Coldfield 0121 321 2101
Walmley 0121 313 2888
Great Barr 0121 358 6222
Thank you for reading and your interest in Acres and our property for sale.
Nigel & Jayne Deekes – Acres Partners
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If you're looking for some pointers for selling your home during the autumn you’ve come to the right place. We’ve compiled some tips that can help your property stand out in the market during the autumn.
Setting the stage for a potential house buyer is crucial in making the right impressions. Remember, you’re not just selling a house, you’re selling a dream or a lifestyle.
Here at Acres Estate Agents we often see autumn as the time when more serious buyers get in touch. These are the ones who will want to see properties to actually move to – they won’t be the tyre-kickers Spring can often bring, just having a nose round to see if a move would be on the cards if they see “ a perfect home “, with no real intention to buy.
Organise early viewings
It can be more of a challenge for your house to stand out in the dark and as the days get shorter, evening viewings don’t always set the best first impression. Homes generally look more appealing during the daytime.
It might be difficult to organise daytime viewings during the week as people are at work, so it’s a good idea to make time during the weekends to try and accommodate more potential buyers viewing.
Ensure your house is well-lit
It can be challenging for natural lighting to brighten up your home during the autumn, to combat the issue, it can be worth investing in some nice lighting. For rooms with large windows, be sure to open all the blinds and curtains as nothing beats natural light. However, for rooms that don’t have the luxury of larger windows, be sure to ensure they are well-lit through other means.
Clean the outdoors of fallen leaves
If you’ve got trees and hedges around the garden, you’ll be aware of how much of a mess fallen leaves cause during the autumn. External house maintenance is always important, but even more so whilst you are trying to sell your property.
Make use of the heating
As the days get shorter, the temperature starts to drop. The last thing you want during a house viewing is for your guests to feel uncomfortable due to being cold, so you’ll want to keep your house a cosy, a nice temperature can go a long way in creating a pleasant and welcoming atmosphere.
Log burners / real or effect coal fire
Always as an appealing feature, have these lit to make a property feel like a home, and help your buyer imagine a cosy night in, within the heart of your home.
Stand out
If your property goes on the market in the Autumn, it’s more likely to get noticed, compared to the traditional Spring influx of properties to the market. This is particularly true when you see how our exceptional photography will show off your home to its best advantage.
We think it’s best to stand out from the crowd, and Autumn is the ideal time to do that.
Final thoughts
Whilst it can seem impossible to time the sale of your property to perfection, Autumn is a great selling time with buyers thinking of a new home for Christmas and of course, those ever-important school applications being submitted.
If you are looking to sell your property, then Autumn could well be the perfect time for you to sell up and move on.
Yes, Spring is often seen as the best time to sell, but we at Acres also find that autumn proves to be a Buoyant time in the Property Market.
What steps can you make to maximise the appeal?
The obvious one is the presentation of your property. Make sure your garden and the outside of your house deliver maximum curb appeal. It’s surprising what you don’t need so a quick dump run to get rid of the clutter always helps free up space. Ensure you do your research and price your home competitively. Most importantly, choose a good local agent who understands the area. Here at Acres, your local independent estate agents, being a market leader in the North Birmingham area we accordingly have an exceptional knowledge of the locality. This means understanding transport links, local schools, and amenities so that we can quickly show the right buyers the right properties. Make October the month you finally make the move you have always wanted to.
If you were thinking of writing Autumn off, stop. Think about it. Autumn could absolutely be the season for you to show your house off to a potential buyer. If you would like to discuss selling your home, please get in touch with us This email address is being protected from spambots. You need JavaScript enabled to view it. or call any of our busy, helpful teams/offices:
Four Oaks 0121 323 3088
Sutton Coldfield 0121 321 2101
Walmley 0121 313 2888
Great Barr 0121 358 6222
Thank you for reading and your interest in Acres and our property for sale.
Nigel & Jayne Deekes – Acres Partners
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If you are considering a move and live within the Great Barr area please give Chris, or his outstanding team a call on 0121 358 6222 or email Chris This email address is being protected from spambots. You need JavaScript enabled to view it.
