Mortgage market not impacted by rate rise

Mortgage market not impacted by rate rise

The decision by the Bank of England to increase the base rate of interest does not appear to have had a significant impact on the mortgage market, reveals new data.

Figures compiled by residential surveyors e.surv conclude the mortgage market saw a 2.5 per cent rise in approvals between October and November.

This increase may partly be a result of homeowners making the decision to switch from variable rate loans to lower fixed rate deals to offset the impact of any future rate rises, but the central bank’s move does not seem to have dampened short-term demand.

However, mortgage approvals remain one per cent lower than the same point in 2016 and there are fewer first-time buyers with small deposits being approved - they accounted for just 16.1 per cent of the loan sector, compared to 20.3 per cent in August.

“After months of speculation, the Bank of England base rate increased to 0.5 per cent and this prompted many people to switch their mortgage and lock in a low rate,” explained , e.surv director Richard Sexton.

He added: “Overall approvals have increased month on month and we expect this to continue as those on variable rate mortgages see their monthly payments increase. Many will be able to switch elsewhere and save.”