Data from the HomeOwners Alliance reveals ‘deep uncertainty’ about the future of mortgage rates, with 37% of people polled expecting rates to go up within the next year.
In the survey of 2000 adults, 25% said they believed rates would hold, 16% thought they would fall, and 22% said they didn’t know what would happen. This ‘reflects broader economic anxiety and confusion’, the national property advice website says, as the industry awaits the Bank of England’s upcoming decision on interest rates.
Paula Higgins, CEO at HomeOwners Alliance, commented:
“That more than a third of the public are bracing for further mortgage rate rises shows how fragile confidence remains. Uncertainty over the economic climate and what’s coming next does nothing for consumer confidence. While the Bank of England weighs up its next move, millions are stuck in limbo, unsure whether to fix their mortgage now or hold out for a potential drop in rates.”
Homeowners were slightly more optimistic about the mortgage market than non-homeowners: they were less likely to expect mortgage rates to rise compared to the overall sample (32% and 37% respectively) and more likely to expect mortgage rates to fall (21% vs 16%).
Homeowners with a mortgage were even more likely to expect mortgage rates to fall, with 26% of respondents predicting a drop compared to 18% of those who own their home outright.
First time buyers, however, predicted a bleaker picture. Almost half (49%) expecting mortgage rates to rise, as opposed to 37% overall – which Higgins attributed to a distorted picture of the market.
She commented:
“It’s particularly worrying that those aspiring to own their first home are least optimistic about mortgage rates with almost half (49%) expecting mortgage rates to rise vs 37% overall. All the doom and gloom around the economy is actually clouding what is an improving mortgage market.”
