A new rise to the base rate, which is currently 5.0%.

Following today’s Monetary Policy Committee (MPC) meeting, the base rate was raised by 0.5% to 5.0%. This is the rate’s 13th straight increase, and it is now at its highest level in 15 years. This is disappointing news at a time when so many people are already struggling with rising living costs. So, why did the MPC decide to raise interest rates again?

Increased pressure on the inflation rate

The high level of inflation persists. While inflation fell to 8.7% in April, it was still more than expected, implying that another interest rate hike was unavoidable. Raising interest rates is a method of combating inflation because it makes borrowing more expensive. This, in turn, encourages consumers to save more, especially since savings accounts should receive a higher rate of interest.

An unexpected increase in employment and wages

What has worsened the problem is that official numbers were issued on June 13th, revealing unexpected UK wage increase. Annual salary for UK employees has increased to 6.5%, up from 6.1% projected. The rate at which salaries have risen is far too rapid to attempt to curb inflation. This is because greater salaries encourage consumers to spend more, even if the wages obtained are insufficient in real terms when compared to the level of inflation. In reality, even adjusted for inflation, wages continue to fall. In addition to pay growth in the UK, employment in the UK has expanded overall. This is by an estimated 250,000 in the months running up to April, against a Reuters poll prediction of 162,000. During that time, the unemployment rate was expected to rise to 4%, but it actually fell to 3.8%.

Andrew Bailey, Governor of the Bank of England, has said that these new figures show the current labour market to be ‘very tight’. Interest rate increases are the key solution for reducing inflation so it looks as if those higher rates will continue for longer than expected. Predictions now state that the interest rate is expected to reach as high as 5.75% or 6% by the end of the year.

Is it better to buy a new build or an older property?

There are numerous factors to consider when purchasing a home, including size, location, and price. Another consideration is whether it is better to purchase a new or older home. The style you choose will be largely determined by personal preference, but we’ve outlined the advantages and disadvantages of each to assist you in making your decision.

How do new builds and older properties differ?

A new build is a completely new home that has never been lived in before. An older home, on the other hand, has had a previous owner. Modern homes can be referred to be new builds, although this is not the case if they have had at least one owner.

The pros and cons of buying a new build

There are various benefits and drawbacks to owning a new-build property, which we’ve detailed below.

Benefits of a new build

No chain. When you’re moving into a new build, you don’t have to wait for someone else to move out.
No risk of being gazumped. When buying straight from the home builder, you don’t need to worry about another buyer gazumping you.
A blank canvas. As you’re the first person to live in your new-build property in London, it’s a completely blank canvas for you to personalise to your taste.
No work is needed. The property has been newly built so you can look forward to moving in and getting settled straight away without having to carry out any work. The only issues you may encounter will be minimal snags that can be easily rectified.
It comes with a warranty. New builds usually come with a 10-year warranty that’s supplied by the developer. This gives you peace of mind that any issues will be fixed. These warranties tend to provide more cover within the first 2 years so be sure to check the warranty details when buying your home.
Energy efficient. New builds are constructed with modern building materials and have to meet high standards. This means that your new-build home will be very well insulated, include an energy-efficient heating system and have double glazing as well as low-energy lighting. If appliances have been included in the property, they will be energy efficient ones too. Having an energy-efficient home in Bexley will not only reduce your energy consumption but will also reduce carbon emissions and your energy bills. Favourable mortgage terms are offered by some lenders to encourage the buying of homes that are energy efficient. Eco-friendly features. New builds tend to have various features to encourage eco-friendly living. For example, dual flushes help to reduce the amount of water usage in the home. Charging points for electric cars and storage areas for bikes promote a greener way of getting around. Some developments also feature outdoor areas that attract wildlife, such as bees and birds.
Can be built off-plan. If you buy your new build off-plan, you can have a say in the design stage. For example, you may be able to give some input into the layout of your home or you may be able to choose your preferred fittings.
An open-plan layout. New builds often have an open-plan design rather than lots of small rooms. This gives the appearance of more space and allows air and light to flow freely throughout your home. Each section of the space usually has multiple functions to make the most of it.
Smart features. With a modern design, new build-homes usually have smart features. For example, a smart thermostat, smart lighting and smart home security devices.
Safe and secure. The high standards for new builds mean that they incorporate various security and safety measures. These can include smoke alarms, carbon monoxide detectors, secure locks on the windows and doors and an alarm system, for example. These safety and security features may make your new build insurance cover
Some developers offer incentives to encourage you to buy from them. They may cover your stamp duty, pay for the cost of the carpets or upgrade the fittings in the property, for example.
Government schemes. Various schemes are available to help you buy a new-build property, such as the First Homes scheme and Deposit Unlock.