Despite most commentators expecting at least three more base rate reductions this year, over a third of the public believe mortgage costs are likely to rise.

So says Paula Higgins (main image) CEO at the property advice website HomeOwners Alliance, adding that this misconception is damaging buyers’ confidence.

When her organisation surveyed 2,000 UK adults, it found 37% expect mortgage rates to go up over the next 12 months, 16% think they will go down, 25% believe rates will hold steady, and 22% don’t know.

This, the HomeOwners Alliance believes, is a reflection of ‘broader economic anxiety and confusion.’

Public bracing themselves

Higgins says: “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.”

She adds that: “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.”

All the doom and gloom around the economy is actually clouding what is an improving mortgage market.”

Higgins concludes: “It’s particularly worrying that those aspiring to own their first home are least optimistic about mortgage rates, with almost half (49%) expecting rates to rise vs 37% overall.

“All the doom and gloom around the economy is actually clouding what is an improving mortgage market.”

It is, ironically, in the first-time buyer sector where some of the biggest improvements are occurring, and a rash of cheaper mortgage deals and loosening lending criteria are being reported in the press.