Some homeowners may be breathing a sigh of relief after the Bank of England’s decision to press pause on interest rate hikes, but many are yet to fully feel the impact of the increases that have already taken place.
“However, a material improvement in mortgage affordability requires the prospect of a cut in interest rates coming on to the horizon. That still looks some way off, suggesting buyers’ budgets are going to remain constrained and that there is a little way to go before house prices bottom out.”Earlier this week, consumer group Which? highlighted concerns around those who are due to come off fixed-rate deals around Christmas, a time when finances are often squeezed.
“However, Which? warned this week that around half a million homeowners are set to come off their fixed-term deals over the Christmas period, meaning households already under pressure due to the cost-of-living crisis could see their monthly repayments increase by hundreds of pounds. Property professionals said the base rate pause could bring some “welcome reassurance” to the housing market.
Andrew Montlake, managing director of the UK-wide mortgage broker Coreco, said: “It now looks like we are at the very top of the interest rate cycle, with swap rates continuing to ease and giving lenders more space to engage in a rate war as they battle for market share and look to get a good start to 2024.