As we all defrost from the winter months and the daffodils start to come out, it’s time to look at why the spring season is the perfect time to buy or sell your property.
What are interest rates?
When borrowing money, the interest rate – also known as the lending rate – is the amount you are charged for doing so.
A mortgage interest rate is the interest you’ll pay on the money you borrow to buy a property and is shown as a percentage. For example, you may have an interest rate of 4% per month which will either be added to your repayments each month or be charged alone as part of an interest-only mortgage.
The current interest rate is 4.5%, with the next announcement due 20 March. It is at its lowest level since June 2023, making it the cheapest time to borrow money and therefore the perfect time to buy a property.
How does the interest rate affect mortgages?
If interest rates rise, borrowing could become more expensive. If you have a £130,000 mortgage that you want to pay off over 25 years and the interest rate on it is 4.5%, the monthly repayment will be £722.58. But if the interest rate is towards the higher end of the scale at 5.7%, the monthly repayment will be £813.91.
Lenders and banks can change the rates of their mortgage products regularly, so it’s crucial to keep up to date as the smallest change can have a big impact. Recently two major lenders, Barclays and Santander, launched mortgage deals with interest rates of less than 4%.
The type of mortgage you choose can also determine how much you are affected by changing interest rates. A fixed-rate mortgage has a fixed interest rate, meaning it will stay at that same amount for an agreed period such as five years. Although more expensive initially, fixed-rate mortgages are beneficial as you know exactly how much your mortgage repayments will be each month, regardless of whether interest rates rise or fall.
A tracker mortgage has an interest rate that moves up and down in line with external market conditions. Tracker mortgages can be an attractive choice, particularly in times of low or falling interest rates as repayments will immediately reflect the economy, rather than the commercial decisions of your bank.
Why is spring a super time to buy and sell?
As the buyers wake up after the winter and start their searches in earnest, spring is the perfect time to get your home on the market. According to Zoopla, February and June are the most popular months for securing a sale, with no seasonal distractions such as Christmas or the summer holidays. There’s also the added benefit of your home looking better when the garden is coming into bloom and the sun is up for longer.
While seasonal sales trends are fairly universal across the UK, it’s worth having a closer look at your local area before entering the market. Check if your council has granted planning permission for any work nearby that may disrupt your sale. Our experts know Cardiff like the back of our hand and can advise you on what is going on in your area.
For buyers, late spring and early summer is typically considered the peak buying season, but the increased competition can often lead to higher asking prices. By securing your house in early spring (March-April), you can dodge the price hike while taking your time to conduct thorough viewings with the longer daylight hours.
We have been helping people buy and sell their homes in Cardiff for over 50 years, so we know the best timings for each property. With our help, you can find the right property at the right time, or get yours off the market. Call us on 02920 626252, visit https://thomashwood.com/, or pop into to see us in our Whitchurch and Radyr branches.