The Bank of England has now delivered its decision that interest rates will increase for the first time in a decade to 0.5%. Looking to see how this would affect the housing market in real terms, Homelyfe conducted a flash survey of 1,000 household decision makers today through personal data and insights platform, CitizenMe. Peter Goodman, CEO of Homelyfe, has made the following comment about the results:
“Potential buyers, particularly first-time buyers, should be wary of how the Bank of England’s decision to increase the base rate figures will affect their mortgage. Should banks and lenders pass on the base rate increase to consumers, we may very well see a large knock on the UK property market. We conducted a flash survey of 1,000 household decision makers today, and found that exactly a third (33%) would reconsider buying and selling a house because of an interest rate rise.
“This is just a quick check of the temperature in the market, but you better believe that mortgage rates will affect the decision between moving home or staying put. In the real world, this means a slowdown in the market, people pulling out of their ongoing sales, and chains collapsing and ultimately people losing money.
“It’s interesting that this decision comes as the government is reviewing regulations to improve the housebuying process and cut down on offers not completing. While the government deliberates, homebuying remains a stressful process for consumers. For us in the insurance industry, it is our responsibility to educate the market on how they protect their finances when making an offer, and bring at least one element of the process back control.”