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Expected Bank base rate rise is dampening buying appetite

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  • 03/11/2003
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General expectations of an increase in base rates this week have had an impact on the public's inte...

General expectations of an increase in base rates this week have had an impact on the public’s intention to buy property, according to Alliance & Leicester.

The lender’s movingimproving index shows only 12% are thinking of buying a home during the next two years, a 3% drop from July’s 15%. Londoners are significantly more likely to be planning a move, with 16% indicating that they will buy a new property during the next two years.

However, October 2002’s figure was also 12%, indicating that overall the market remains steady. Paul Cooper, head of mortgages at Alliance & Leicester, said: “The recent popularity of fixed rate mortgage products suggests that people may be expecting a rise in interest rates in the near future.

“Rumours of a rise in base rates may be impacting on people’s willingness to buy property but it is good to see that intentions to move have not declined year on year. This shows the continuing resilience of the housing market.”

Although younger buyers are still a market driver, their proportion of the whole has fallen. Those in their 20s looking to buy a home has fallen from 30% in July to 25%, while for those in their 30s the percentage has fallen from 24% to 20% during the same period.

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