Harley Kagan

68% of brokers believe that base rate rises have had no impact on business

Over two-thirds of brokers (68%) believe that the two most recent Bank of England base rate increases have had no impact on their business, according to new research.

United Trust Bank’s (UTB) latest broker sentiment survey revealed that 16% of brokers felt that the two increases since November 2017 had had a positive impact on their business, compared with 16% who felt they had had a negative impact.

When asked what impact the increases have had on the UK’s residential property market over the past 12 months, 27% of respondents believed that the effect had been negative, 64% said neutral, while 9% claimed it had been positive.

The base rate currently stands at 0.75% following an increase from 0.5% on 2nd August 2018, having previously increased from 0.25% to 0.5% on 2nd November 2017.

The survey also asked brokers to predict what the base rate would be at the end of 2019.

Almost half of respondents (46%) expected the base rate to be 1%, while 12% expected the rate to fall below the current 0.75%.

What do you expect the Base Rate to be at the end of 2019?

Harley Kagan, group managing director at UTB (pictured above), said that it was encouraging to see that for a majority of brokers the two base rate increases had had little to no impact on their businesses over the last 12 months.

“I believe the same is broadly true from a lender perspective, although expectations of higher mortgage rates to come may have been a contributing factor to a general cooling of activity in the residential property market.

“Developers and housebuilders need to be mindful of future demand and pressure on pricing when planning future projects and that – coupled with Brexit uncertainty – is causing some to take their foot off the gas with new starts.”

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