The number of British adults planning to move home in 2018, which was previously consistent at 8%, has dropped to 6% in the 48 hours following the BoE’s announcement to increase its base rate, according to new research from AA Financial Services.
After there had been concern that mortgages were going to become more expensive for homeowners, the study from AA suggested that rising rates will dampen consumer appetite for moving home.
In contrast with the many existing house price studies which track historic prices, the new study from AA looked at future demand for property, tracking consumers intentions to move, the timescale for moving, planned spend on a new home and the regions where people are most likely to be moving to and from.
The figures from July suggested a summer high in property confidence, with the number of people planning to move in the very short term (three months) on the rise, the average planned spend on a new home increasing to £320,736 from £312,702, movers heading south as they plan to buy rather than rent, and 20~% of under 25’s planning to buy – up from 13%.
Commenting on the findings, AA Financial Services managing director David Searle said: “After years of record low interest rates, last week’s rise - and indications that more is yet to come – mean that the cost of buying a home is going to get more expensive. Given many people are moving home to save money, release equity or to make their money go a bit further it seems that, for some, the reality of living with rate rises may well temper their plans to move in the short term.
“We saw many positive signs emerging from our research in July, promise of a house moving high for late summer, which the rate rise seems to have dampened.”
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