Interest rates remain unchanged…for now

The Bank of England announcement to keep interest rates at 0.5% is a positive one for the Scottish property market.

It will enable prolonged stability in the market that is very much needed at this stage.

Having seen encouraging signs so far in 2015, this decision will only support this and at the same time enhance personal financial confidence and short term planning.

Having seen changes to LBTT rates earlier in the year, a rise in interest rates hot on the heels of this would have been further significant change for the Scottish market.

Looking ahead, we would expect, once the holiday season is over, a further increase in activity in the Scottish market.

But of course, while there has been no change, we cannot ignore the fact that interest rate increases may be round the corner. Borrowers certainly should be chasing some of the long-term fixed rates now on offer.

At this stage however, any increase in real income is fragile and added cost (higher interest rates) would probably be seen as the start of the process for more rises in the relatively near future. This could reduce confidence rapidly for those living close to their income breadline.

Furthermore, an increase would potentially have a knock on effect with investors and plans of entrepreneurs. Businesses may reconsider investment strategies in the face of uncertain future interest rate rises.

Savers may receive small comfort in more attractive savings rates going forward but this is likely to be of little comfort for the majority who have limited savings having survived austere times and paid off debt.

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