March 2022 Market Update 
As I’m sure many of you will have seen the bank of England increased the base rate from 0.5% to 0.75% 
on Thursday 17th February. This is a result of rising inflation and America increasing their interest rates a week earlier. 
But why does the Bank of England increase interest rates? 
One of the tools the Bank of England uses to keep control on the prices of all of the things we buy, is to 
make them more expensive to buy to slow the demand for these items as they become more expensive 
to buy. So today with the number of home buyers far outweighing the number of properties for sale, this 
has driven house prices up. So, an attempt to slow down house prices the Bank of England increase the 
cost of lending which will in turn force some buyers out of the market as it is no longer affordable for 
them to buy at this stage. Without this the price of houses and other commodities would continue to grow 
to unsustainable levels. 
What does this mean to us? 
As the money that all lenders receive from the Bank of England to lend to its customers has now become 
more expensive, lenders will now look to increase their rates also to maintain their profit margins. 
Anybody who is on a variable or tracker rate, your rate and monthly payments are going to increase. If 
you are on a fixed rate mortgage, you will not see any difference. Your fixed rate mortgage provides 
protection against this happening. 
What’s going to happen later in the year? 
As the cost of most things, we are using is also rising – gas and electric, fuel, council tax and fuel. I don’t 
believe the Bank of England have much more opportunity to increase interest rates much further than 
this in the short term. If people don’t have enough disposable income to pay increased mortgage or utility 
bills, they run the risk of missing payments leading to financial difficulties. When people begin to fall 
behind on their mortgage payments, lenders begin to repossess properties and mass repossessions 
causes the market to collapse. So, unless the costs in other areas such as energy, fuel or food begin to 
stabilise or incomes rise to balance out the cost of living, the Bank of England cannot increase rates too 
much. Small increases can stabilise costs and demand, but bigger increases make life unaffordable for 
people and this can lead to major economic problems. 
Is now still a good time to buy property? 
If the property is for you to live and call home, you shouldn’t see a property as an asset or commodity for 
you to cash in because you always need somewhere to live. So, when you sell, the money you have 
from the sale is short lived as you will then use this as a deposit on your next purchase or spend it on 
renting. Also ‘a rising tide raises all boats’, although your home goes up in value, so do all of the other 
properties you would like to purchase so you never outgrow or beat the market. 
If the property you are looking to buy is going to be an asset, this should be done so with a long-term 
view. Markets go up and down in cycles, but year on year the trend is always upwards. This is due to 
supply and demand; we live on a small island with a growing population that is living longer and longer 
and a finite amount of room to build more homes. So, by holding a property for the long term you can 
afford to ride out many upturns and downturns in the market, emjoying cashflow in the form of rent 
Final thought... 
If you are on a fixed rate mortgage that is coming to an end or are on a variable or tracker mortgage, 
now is the perfect time to review your mortgage to see if you can find a more competitive interest rate or 
alter your mortgage terms to make your mortgage more comfortable.  
At Green & Green we are happy to review your mortgage for free whether you are a client of ours or not.  
Call us on 01482 205084 or email 
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