Rising UK interest rates unlikely to lead to the price drop some Hongkongers are waiting for, analysts say
- An interest-rate increase is unlikely to dent appetite for home ownership in the UK, says executive at London property agency Benham and Reeves
- Anyone waiting for a dip will be in ‘for a long wait’, says the director of Manchester-based developer Beech Holdings
The UK is poised to hike interest rates from the current record low of 0.1 per cent sooner than expected, as consumer prices have been climbing steadily and are likely to peak at 5 per cent in April next year, according to the Bank of England.
“An interest-rate increase may well be on the cards, but we believe this will be marginal and the general expectation is, while [the rates] may hit 1 per cent, this will not materialise until the end of next year,” said Marc von Grundherr, director of London-based property agency Benham and Reeves. “As a result, [they are] unlikely to dent the appetite for home ownership in the UK, and we simply will not see the mass exodus of market activity that would be required to cause a decline in house prices.”
The UK last year made it easier for 3 million Hongkongers who qualify for a BN(O) passport and their dependents to relocate to Britain and stay and work for extendable periods of 12 months, creating a path to citizenship. It was London’s response to Beijing’s imposition of a sweeping national security law that is perceived to have eroded Hong Kong’s freedoms guaranteed under a Sino-British pact.
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