Bank of England to raise interest rates to 0.5% today?
If you live long enough you become wiser to the tactics of Chancellors, and how they might play out in real terms. For example, we regularly report on the BoE interest rate, commenting on the Chancellor’s fast and loose housing market plays and the fiscal pummeling that was the SDLT holiday. We’ve also reflected on past Chancellors, like in 1988 when completions actually doubled to two million before a nuclear winter of rising interest rates, negative equity and a stagnant market.
The Bank of England had kept the base lending rate at 0.1% for a long period, the lowest rate for 300 years, before it raised it to 0.25%. Now, however, there is talk it will rise to 0.5%, with two other rises this side of Christmas.
As reported in The Guardian today: “Britons are braced for the Bank of England to increase interest rates on Thursday as the central bank seeks to tackle price pressures that have pushed annual inflation to a 30-year high of 5.4%.
“Most City economists said the majority of members on the Bank’s rate-setting committee would increase the base rate from 0.25% to 0.5%, with the likelihood that at least two more increases would follow during 2022.
“On the eve of the Bank’s decision, 29 economists from 45 respondents to a survey by Reuters predicted that the monetary policy committee (MPC) would go ahead with a rise, while 16 forecast that rates were likely to remain on hold.”
With inflation going skyward, another big headwind is about to break. Very soon, commercial landlords are likely to be taking back their premises as defaulting businesses can not meet the full costs of staying in the game.
As things play out, this will likely percolate into a more negative business landscape. Estate agents are already having a hard time. Why? Well, they may list a home today and sell it tomorrow, but there are only a handful of properties trickling onto the market.
If a sales team sells ten properties a month as there is no stock, in three months an estate agency’s costs to run the operation are not being met.
The inevitable “boom and bust” has been swept under the carpet recently, but for those ex-agent types like myself who have seen the housing market peaks and troughs, interest rates (or the cost of funding a home purchase) are a key factor underpinning any housing market.
With 50% of last year’s buyers being first time buyers (94% having a mortgage), then if your mortgage was based on a 0.1% Bank of England base rate level and it now is based on 0.5% or even 0.75%, that is going to make you think long and hard about jumping into housing in 2022.
Maybe today there will be no rise in the base rate, but perhaps like Boris, it is not a case of if but when. unfortunately for the housing market, sentiment is all the rage, and if people fall out of love with the idea of moving as costs rise, we may be entering a period much like post-1988.
Written by Andrew Stanton
Acquaint CRM integrates with the Tenancy Deposit Scheme
Forward-thinking property software provider Acquaint CRM, has integrated their technology with the new API solution created by Government-backed Tenancy Deposit Scheme (TDS), providing a superior and more secure method of transferring tenancy deposits.
The TDS APIs are designed to make the lives of agents easier. It removes the time-consuming task of duplicating the deposit registration data from a CRM system onto the deposit scheme platform, which has long been a manual task for agents. Instead, the APIs automatically transfer the data without agents having to spend the time re-inputting. The TDS API PropTech can help agents by:
- removing time lost duplicating tenancy deposit entries,
- reducing inaccuracies due to the manual inputting of data,
- having a CRM that incorporates their deposit protection needs,
- saving more time to spend on growing their business.
“The TDS integration is another time and cost saving enhancement to Acquaint CRM, making our customers’ life quicker and easier when processing tenancies,” commented Grant Jaquest, Director of Bright Logic.
Founded in 2006, Bright Logic, the developers of Acquaint CRM, are a dynamic team of programmers, designers and property professionals. They are an independent company, 100% self-funded, with resources and finance to secure their future through year-on-year growth.
Acquaint CRM is a fully integrated software package for letting agents and estate agents. Robustly designed using the latest technologies, it seamlessly handles Residential and Commercial Sales & Lettings, Property Management, Contact Management, Marketing, Diary and Client Accounting.
“We are thrilled to make use of TDS’ API integration with Acquaint CRM in our agency” commented Ronnie Clarke from Rent Group, an independent rental and lettings agency covering the Hertfordshire, Bedfordshire and Buckinghamshire areas.
“The advantages for us have been a reduction in admin-heavy data entry, meaning we can focus on other areas in our roles. The API has given us a competitive edge by allowing us to use the time we have saved in automating this part of the deposit process to grow our business. Further information regarding TDS’s API can be found here
Andrew Stanton is the founder of Proptech-PR, a consultancy for Founders of Proptechs looking to grow and exit, using his influence from decades of industry experience. Separately he is a consultant to some of the biggest names in global real estate, advising on sales and acquisitions, market positioning, and operations. He is also the founder of Proptech-X Proptech & Property News, where his insights, connections and detailed analysis and commentary on proptech and real estate are second to none.