Will Interest Rates Crash The Housing Market

09/29/22 • 17 min

With the news of interest rates rapidly increasing and mortgage products being removed across lenders, it’s understandable to question whether interest rates will cause a crash in the housing market. In this episode, Mark explores why this may or may not happen and the other issues the current turmoil in the market could cause.

KEY TAKEAWAYS

UK base rate is said to hit 6% by May 2023 but this is a market expectation, it may not happen.
There is still demand in the housing market currently but there has been a significant slowdown in the past 6 months.
One way the government could speed up growth in the economy and increase productivity is to remove a lot of unnecessary EU regulations.
The media loves bad news and anything they can sensationalise, hence them talking about housing market crashes and a sterling crisis.
If you do have debt, inflation does have an upside, inflation means your debt is lowered.
In a residential mortgage market, Mark prefers to use fixed-term mortgages, especially long-term ones if you know you aren’t going to move, you can still get good rates now.

BEST MOMENTS

“ We’ve gone straight through the crossroads now and things are changing quite rapidly”

“Demand will probably start dropping considerably, we’re probably in recession already”

“Could house prices crash? Absolutely”

“History tells us when inflation rates start to increase they do so quite quickly”

VALUABLE RESOURCES

https://www.youtube.com/user/progressiveproperty https://www.progressiveproperty.co.uk/the-progressive-co-founders/

ABOUT THE HOST

Mark has bought, sold or has managed around 1,000 property units for himself, Rob, his family and his investors since 2003. He is a system and spreadsheet geek and has developed a complex, confidential deal analyser system of buying residential, commercial and multi-let properties.

CONTACT METHOD

Email: [email protected]

LinkedIn: https://www.linkedin.com/in/markhomer1

Facebook: https://www.facebook.com/markprogressive

Twitter: https://twitter.com/markprogressive

‘Brought to you by Progressive Media’: https://progressivemedia.uk/

KEY TAKEAWAYS

UK base rate is said to hit 6% by May 2023 but this is a market expectation, it may not happen.
There is still demand in the housing market currently but there has been a significant slowdown in the past 6 months.
One way the government could speed up growth in the economy and increase productivity is to remove a lot of unnecessary EU regulations.
The media loves bad news and anything they can sensationalise, hence them talking about housing market crashes and a sterling crisis.
If you do have debt, inflation does have an upside, inflation means your debt is lowered.
In a residential mortgage market, Mark prefers to use fixed-term mortgages, especially long-term ones if you know you aren’t going to move, you can still get good rates now.

BEST MOMENTS

“ We’ve gone straight through the crossroads now and things are changing quite rapidly”

“Demand will probably start dropping considerably, we’re probably in recession already”

“Could house prices crash? Absolutely”

“History tells us when inflation rates start to increase they do so quite quickly”

VALUABLE RESOURCES

https://www.youtube.com/user/progressiveproperty https://www.progressiveproperty.co.uk/the-progressive-co-founders/

ABOUT THE HOST

CONTACT METHOD

Email: [email protected]

LinkedIn: https://www.linkedin.com/in/markhomer1

Facebook: https://www.facebook.com/markprogressive

Twitter: https://twitter.com/markprogressive

‘Brought to you by Progressive Media’: https://progressivemedia.uk/

Previous Episode

How to Save Money During the Energy Bills Crisis

A practical and informative episode where Mark gives invaluable tips on what you can do to save money during the energy crisis. Mark also gives his long-term view on the impact of the cost-of-living crisis on the housing market.

KEY TAKEAWAYS

Since 2019 business energy rates are set to go up 800%!
Putting solar on buildings is a way to save money, payback for solar now is only around 2 1⁄2 years because of the cost of energy
Individual room heating controls, particularly in HMO’s can save landlords a significant amount
Heating controls, the right ones, combined with solar can save you around 30%
Bleed your radiators to ensure they are working efficiently. Move furniture away from radiators to increase better heat flow.
Fix any draughts around doors, windows etc
Close your curtains, it can reduce heat loss by up to 17%
Bulk cook, if you are heating your oven, cook multiple items and meals to utilise the energy being used.
Keeping your fridge clean and ventilated as well as defrosting your freezer will help them be more energy efficient
Submit regular energy readings and pay by direct debit as this reduces the cost of your bill.
Consider excluding energy bills for future tenancies or find other ways to encourage tenants to be more responsible with energy usage.
There are fewer landlords in the sector now, and rents are increasing as a reflection.

BEST MOMENTS

“ Residents are going to be paying just a little bit more than they are playing at the moment”

“They think inflation is going to hit 22% next year, which is absolutely nuts”

“Don’t charge your phone overnight and look at energy ratings on anything you buy”

“We’re trying to encourage tenants to be more responsible with their energy usage”

“You need to stay ahead of it, of the changes and work out how you are going to react”

VALUABLE RESOURCES

https://www.youtube.com/user/progressiveproperty https://www.progressiveproperty.co.uk/the-progressive-co-founders/

ABOUT THE HOST

CONTACT METHOD

Email: [email protected]

LinkedIn: https://www.linkedin.com/in/markhomer1

Facebook: https://www.facebook.com/markprogressive

Twitter: https://twitter.com/markprogressive

‘Brought to you by Progressive Media’: https://progressivemedia.uk/

Next Episode

Should You Buy or Lease a Car?

Rob and Mark get asked several times a week whether to buy or lease a car! Mark knows more than almost anyone else all about owning cars, including the best deals in each situation. Listen in to be educated on all things owning cars!

KEY TAKEAWAYS

If you are buying a high-end supercar or classic, the best thing is to buy it at 2+ years old.
Financing is a good option, you can even approach lease companies to buy it, lease it to you and give you the option of buying at the end of the lease.
A tax-efficient way to buy a car is to put it against an LLP or as a sole trader.
A flat rate isn’t as good a deal as it sounds. You often actually paying more.
What Mark focuses on above everything else, is the yearly cost including depreciation and maintenance.
Manufacturers at any one point may have too many cars. They don’t want to reduce prices on the forecourt because of this though as there will still be people who will pay that. They instead get discounted via contract hire.
The car market is starting to recover from the supply issue over the Covid pandemic. You will start to see better deals via contract hire.

BEST MOMENTS

“ Often a good idea to buy with finance”

“When the market turns, it’s gonna turn hard”

“If you look at the APR, that’s the real rate”

“Are you bothered about owning something or are you bothered about paying the least amount on the ownership you have”

“What do I get, for the best car, for the least about of money”

VALUABLE RESOURCES

https://www.youtube.com/user/progressiveproperty https://www.progressiveproperty.co.uk/the-progressive-co-founders/

ABOUT THE HOST

CONTACT METHOD

Email: [email protected]

LinkedIn: https://www.linkedin.com/in/markhomer1