Nicol & Co explains slight rises in mortgage interest rates as property market remains healthy.

One of Worcestershire’s leading estate agents has put the recent slight interest rate rises into context for home buyers, reassuring them that the property market is still positive.

Matt Nicol, managing director of Nicol & Co, made the comments in the wake of recent mortgage rate rises from the likes of HSBC, Halifax, Nationwide and Santander.

Mr Nicol, whose company has offices in Droitwich, Malvern and Worcestershire, said: “Rates have started to creep up, with Santander raising their rates by 0.34%, following similar rises by HSBC, Nationwide and Halifax, and that will be of concern. 

“You may even find that rates do creep up a little bit more, because no-one wants to be the lender with the lowest interest rate as they would get an absolute deluge of buyers.

“But the truth is that the housing market, especially locally, is still healthy, reflected by how two properties we are handling in Worcester and another in Malvern recently sold before we even had chance to market them. 

“On the interest rate rises, there is a simply bit of uncertainty and volatility in the swap rates, which is what the banks use to borrow money from each other, and that is the problem at the moment.

“The UK inflation rate is still at 4%, and the banks really needs that number to come down for swap rates to improve.

“Our recommendation to potential borrowers is that if you are in the process of applying for a mortgage or remortgage, then get your paperwork back to your broker as early as possible to secure the rate you’re discussing.

“The next time the Bank of England’s Monetary Policy Committee meets is on the 21 March, so that will be the next time we hear whether the base rate is going to reduce at all.”

Mr Nicol also pointed to recent national statistics which showed that agreed house sale prices had remained strong in February at £339 per square foot, up from January’s £331, which “reflected a consistent increase in property values across the UK”.

Mr Nicol added that gross UK sales had seen a significant 15% boost on the year-to-date average for 2024, and 18% higher than the 2023 weekly average, with net sales up 31% on 2023.

He said: “This suggests a growing demand and an active market, highlighting a strong and continuing interest in property acquisition.

“Our advice therefore is to ignore the doom and gloom if anyone suggests the market’s crashing, because it certainly isn’t.

“But it is a good time if you’re looking to buy to get in as early as possible to secure the lowest mortgage rate you can find.”