Real estate group urges Bank of England to avoid further…

The Bank of England is under pressure from property professionals to avoid further interest rate hikes this week.

The Bank’s Monetary Policy Committee is widely expected to raise interest rates for the sixth consecutive month this week from the current rate of 1.75%.
It comes as inflation fell to 9.9% earlier this month, while Prime Minister Liz Truss unveiled a new two-year energy price cap worth £2,500 for a typical household.

Jonathan Rolande, spokesman for the National Association of Property Buyers, said another rate hike could hit those who are already cutting.

He said: “Consumers have already started to cut spending.

“This is exactly what the Bank of England wanted to see and we should now see inflation come down over the next few months.

“Hopefully in light of rising energy costs and everything else heading into winter, interest rates won’t go up. The mortgage market is divided into three, with one third mortgage free, one third fixed rate and one third variable rate.

“Another rate hike will only affect that smaller part of the market that is more than likely already cutting whatever it can.

“The very crisis caused by inflation may be the key to stabilizing the economy, as all wasteful spending ceases. Further interest rate hikes could push those who are ‘just about to manage’ to end.”

Instead, Rolande said, more support is needed for the “unbalanced” housing market.

The NAPB is calling on the government to help prevent a property crash with measures such as stamp duty and planning reform.

He added: “We have to start by reforming the stamp duty. A positive step would be to see zero rates for retirees moving down in terms of bedroom count, reduced rates for those involved in buy-to-let transactions, and zero rates for first-time buyers in less rich.

“We should also consider selling disused municipal land for housing provided it is built within a year. Where land is not purchased by developers, councils should be encouraged to organize build and lease schemes.

“Finally, I would like ministers to offer tax relief to landlords who commit to long-term renting with reasonable and fixed rent increases. Longer-term renting is a greater risk for the landlord, so reward- le for providing more security to tenants.