Homebuyers should get used to interest rates of 6% to 7% being the norm, a senior industry executive claims.
Peter Brodnicki, chief executive of the Mortgage Advice Bureau, suggested higher rates will prompt some to postpone their buying decisions.
Speaking on the latest episode of The Home Stretch podcast from the Guild of Property Professionals, he said: “We are now seeing rates start with a six, with another rate rise or two likely, although the larger than expected fall in inflation announced a few days ago is helpful.
“I think this is something that we will have to get used to for a while until inflation can be brought under control, as whilst it sits over 3% it is difficult to see interest rates falling. When inflation falls, we should see rates decrease fairly quickly, but we should not expect this to happen in the short term.”
In response, Iain McKenzie, chief executive of the Guild, said that for those that have been in the sector for some time, transacting in a world where interest rates are high is nothing new.
He added: “That said, what is the impact of the very sharp rise in terms of the consumers’ mindset? Are people putting off their decision to buy thinking rates are going to come down at some point and we possibly get back to a zero percent or one percent base rate? Or is this just the new norm and people are accepting it?”
Brodnicki said that if you are buying then certainly some will definitely be postponing their decision to do so but there is more urgency for those remortgaging.
