New builds affected by interest rate increases
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by Kay Mitchell
Bovis, the home building company has announced a decline in its stock value saying that rising interest rates is causing a drop in potential buyers visiting their sites.
The company experienced a fall of 11% in their shares â€“ the biggest drop recorded. In addition, shares in the UKâ€™s largest homebuilder, Taylor Wimpey Plc, also decreased in value by 5.3%
According to the Nationwide, property prices in the UK grew by over 5% in all regions of the UK over the past 12 months and 5 out of 13 regions noted double digit growth.
According to Bovis, confidence is dwindling, buyers are aware that they have to pay more and are studying their finances to see whatâ€™s affordable.
The Bank of England has increased interest rates 5 times in the last year and they are at their highest level since March 2001. Bovis remarked that the Bank has been specific in its desire to cut consumer spending and the rates have increased to reflect this.
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