It would seem that despite reports earlier in the year that soaring inflation would force the Bank’s Monetary Policy Committee to increase interest rates by May, their defiant decision to hold the base rate at its historic level, has led the public to believe that it could be some time before rates rise.
Even more significant was the result that, of those respondents who believe rates could rise, nearly 70% thought this would only be a moderate rise by a maximum of 0.5%. By comparison, at the start of the year, 40% of respondents believed an increase could be anything from 0.75% to 3% or more.
Other results from the survey revealed that only 16% of respondents believe that house prices will fall over the next 12 months, the lowest figure since the survey began.
This could indicate that the public are of the impression that prices have leveled off and thus explains why 70% of respondents believe property is the best investment, with the same number of the opinion that now is a good time to invest in UK property.
Of the 58% of respondents who said they would consider making a foreign property investment, many appear to be focusing their attention on the America’s, with the USA holding number one spot, followed by the Caribbean and Brazil.
Managing Director of the Worldwide Property Group, Kevin Wilkes said:
“By maintaining the base rate at 0.5% in May, the month that many had marked as the changing point, the Bank of England has offered renewed confidence to those expecting a rise and highlighted that the fragile state of the economy makes this an unlikely event for some time to come.
"Whilst homeowners continue to the reap the benefits, savers are undoubtedly suffering and are being forced to consider alternatives such as property in order to see a long term return on their investment.
"I am not surprised the USA is most popular for those looking to make a foreign investment. The decline in US house prices has been as high as 60% in some areas since the market peaked in June 2006. It’s hard to see how the market can drop much further.”
