Housing market remains buoyant despite change in interest rates

5th February 2004

Today’s decision by the Bank of England to increase interest rates by a quarter of a percentage point is expected to have little impact on house prices in the East Midlands, according to property developer Fairgrove Homes. “The property market in this part of the country remains buoyant, with demand for homes continuing to grow.” says Steve Midgley, Managing Director of Fairgrove Homes. “As the property market begins to slow down in other parts of the country, the East Midlands region is still strong enough to shoulder the extra costs of borrowing.”

He adds: “Analysts have long been forecasting that interest rates would change. With media speculation about rising interest rates gaining ground over the last few months, we have seen sensible house buyers factor in the costs of future borrowing when considering purchasing a new home. As a result, many new homebuyers have already considered the implications of higher mortgage costs.”

An increasing number of homebuyers are now considering mortgages that are either fixed rate or linked to the base rate. “However, rates are still at their lowest for 50 years, so most people are not being squeezed by the rising costs of borrowing,” says Midgley. “It is also highly unlikely that interest rates will be at the 9% level that we saw around 10 years ago.” But he sounds a note of caution: “When interest rates stand at 10% and go up by _ %, this represents a very small increase in the overall scheme of things. But if the initial interest rate is 3.5%, an increase by _% represents a greater change to borrowers.”

About Fairgrove Homes
Fairgrove Homes is a locally owned business that prides itself on building individual homes of character. The company combines quality with small developments in desirable locations to meet customers’ needs. Fairgrove Homes’ current development sites include:

• Dobson’s Mill in Sutton in Ashfield, Nottinghamshire
• Olders Valley, Woodville, and Old School Woods, Shipley Park, Derbyshire
• The Old Bull Farm, Sutton Bonington, Nottinghamshire.

Further new developments are situated at The Bruntings, Eakring Road, Mansfield, and Orton Fields, Bramcote, Nottinghamshire, as well as Loscoe, Derbyshire.

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