I’m a layman, not an expert by any means but wouldn’t interest rate increasing mean spending, including buying property, decrease? Would that not mean that house prices would fall to intice more spending?
I understand currently interest rates are normal zing or falling but hasn’t this been the case for many years now since COVID lockdown?
In: Economics
Very simple in the UK, just aren’t enough houses so demand pushes prices up. The number of people goes up faster than the number of houses. Very high student population so some property sits empty for part of the year in anticipation of high rents during term time. Very high potential income from short-term holiday rentals so again lots of homes which could be used for permanent residence instead used to accommodate tourists and sit empty for part of the year. Multiple properties owned by a single family used for seasonal trips etc. Some property being sat on speculatively, quite a lot of this where I live in scotland as the developers try to negotiate splitting large buildings into lots of rental units, there’s some tension with local residents who oppose more ‘homes of multiple occupancy’ dwellings near them.
Interest rates can do what they want but I can’t live in a field so I go from spending 30% of take home income in rent to paying 50% for rent, it is simply a cost that has to be borne. Or pay more in mortgage rates etc, people just find the money.
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