In­ter­est up – clas­sic sales sta­ble

An­a­lysts say raised in­ter­est rates shouldn’t af­fect the UK’s clas­sic market

Classic Car Weekly (UK) - - This Week - Mur­ray Scul­lion

The Bank of Eng­land has raised in­ter­est rates for the first time in ten years – but in­dus­try ex­perts pre­dict that the clas­sic car in­dus­try will re­main mostly un­changed.

The rise from 0.25 per cent to 0.5 per cent, a re­sult of the bank’s at­tempt to slow in­fla­tion, came into ef­fect on 2 Novem­ber.

Auc­tion an­a­lyst Richard Hud­son Evans, thinks that the auc­tion scene will re­main mostly un­af­fected, but there might be some more move­ment as peo­ple look to liq­uefy as­sets. He says: ‘I cer­tainly don’t think it will have any im­me­di­ate ef­fect. If any­thing, I think there will be a few peo­ple who are wor­ried about in­creas­ing mort­gages and credit card bills. Th­ese peo­ple will at­tempt to off­load clas­sics and cash them in. I pre­dict that some more cars will come to auc­tion, but there won’t be an avalanche.’

Si­mon Lam­bert, edi­tor of spe­cial­ist fi­nan­cial web­site, thi­sis­, sees a po­ten­tial cool­ing of the clas­sic market. He says: ‘For many, the Bank of Eng­land’s de­ci­sion to raise the base rate will feel a long way away from the clas­sic car world, but the two are con­nected.

‘Clas­sic car val­ues have rock­eted through the low in­ter­est rate era, as those with sav­ings de­cide ei­ther to en­joy their money by spend­ing it on a dream car, or that a good ap­pre­ci­at­ing clas­sic is a bet­ter prospect than earn­ing next to noth­ing in in­ter­est on cash in the bank.

‘A slight shift up to 0.5 per cent for the base rate won’t change things much, but if we are at the start of a cy­cle where rates rise quicker than pre­vi­ously ex­pected, it could take some of the heat out of the clas­sic car market.’

His­torics at Brook­lands’ auc­tion di­rec­tor, Ed­ward Bridger-Stille, re­mains up­beat and says: ‘I an­tic­i­pate that clas­sic car val­ues will re­main largely un­af­fected by the very mod­est in­ter­est rate in­crease.

‘A few pounds more on loans will not dent prices. Con­fi­dence, how­ever, is a dif­fer­ent thing al­to­gether and rather harder to pre­dict.’

As in­ter­est rates in­crease and vari­able term mort­gages and credit cards get more ex­pen­sive, ex­perts pre­dict that some peo­ple may cash in on their clas­sics to re­coup the losses.

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