A fifth of UK homeowners say interest rates continue to price them out of making a property move despite a series of base rate cuts.
The Monetary Policy Committee meets later today to decide whether to reduce the base rate from its current level of 3.75%, following a cut in December.
However latest research suggests confidence among potential movers remains fragile.
A survey of 1,000 UK homeowners by cash-buying firm We Buy Any Home found that affordability concerns remain widespread, with interest rates cited as a major barrier to moving home.
INTEREST RATE CONCERNS
Among the 44% of homeowners who said they were worried about being able to afford a new property, more than half (53%) pointed specifically to concerns around interest rates and their ability to keep up with mortgage repayments.
The research also indicates that borrowing costs are weighing particularly heavily on younger homeowners.
More than one in five respondents aged 25 to 34 (21%) and 35 to 44 (21%) said they were “very concerned” about future interest rates, while a further 37% and 44% respectively said they were “somewhat concerned”.
ROUGH RIDE
Elliot Castle (main picture, inset), Chief Executive of We Buy Any Home, says: “The last few years has seen a rough ride for many homeowners.
“Borrowing costs are continuing to shape decision making across the property market and our insights add fresh urgency to calls for a more supportive lending environment.
“Many potential movers are still feeling the pinch of elevated mortgage costs and economic uncertainty. A rate cut could really breathe life into the housing market, which is currently rather stagnant.
“Interest rates aren’t just numbers, they affect dreams of a bigger home, making an all-important location move or even the difference in space for a growing family.”
CAUTIOUS OPTIMISM
Castle adds that there is cautious optimism ahead of the Bank’s decision. “There’s hope that Thursday may bring a further cut to interest rates, which would likely lead to reduced monthly mortgage costs for those looking to take out a new loan or on a tracker product, boost buyer confidence and make moving more affordable.
“The combination of lower inflation and potential future rate-cuts could provide a much-needed springboard for the housing market.”
