Housing market facing ‘crunch time’, Propertymark warns

The housing market is facing a crunch time in the next few weeks, Propertymark warns, with the Bank of England’s interest rate decision next week and the looming Budget.

New Chancellor John Healey will deliver his first Budget next month, which lies between two Bank Rate announcements, this month and in November.

There is a third opportunity for the Bank to change the interest rate just before Christmas.

Propertymark is signalling the importance to a hesitant housing market of the remaining time this year.

Both factors will determine future sentiment within the housing market over the coming months.”

Nathan Emerson, Chief Executive of Propertymark (pictured), says: “Over the coming weeks, we will see further details of how the Bank of England feels the direction of travel should develop regarding the base rate. We will also see what key details will be announced regarding housing within the Autumn Budget.

“Both factors will determine future sentiment within the housing market over the coming months.”

Rates rise

Finance data firm Moneyfacts is warning that lenders are expected to raise mortgage rates, with HSBC and NatWest so far the biggest banks to increase rates since the start of this month.

Rachel Springall, Finance Expert at Moneyfacts, says: “The pricing margins among major lenders are under pressure due to renewed volatility in the swap rate market, so it is somewhat inevitable for them to adjust rates.

“Borrowers expecting mortgages rates to drop in the coming weeks have had their hopes dashed.”

In July, the Bank held interest rates at 3.75% again, but three members of its nine-strong Monetary Policy Committee (MPC) voted for an increase.