Foxtons sees limited housing market impact from UK base rate rise to 4%
TLT•Foxtons expects the Bank of England’s base rate increase to 4% to have limited impact on the housing market, as many fixed-rate mortgage deals already reflect the expected rise. Two-year fixed mortgage rates averaged 5.55% in October, while homes for sale across Great Britain reached their highest October level since 2014.
1. Mortgage rates and supply
Foxtons’ November 5 analysis expects limited housing-market impact from the Bank of England’s base rate increase to 4%. It says most fixed-rate mortgage deals already reflect the expected increase through swap rates, and existing mortgage offers retain their rates. Rightmove figures cited in the analysis show average two-year fixed mortgage rates reached 5.55% in October, up from 4.25% in February.
2. Buyer competition
Homes for sale across Great Britain reached their highest October level since 2014, giving buyers more choice amid reduced competition. Foxtons said lower mortgage rates could bring more buyers into the market and increase competition, while winter buyers remain highly motivated.
