Aneisha Beveridge, research director at Hamptons and Connells Group, said. “Today’s hold from the Bank of England was widely expected, but it comes as confidence in the housing market is being tested.
“Ongoing geopolitical tensions, particularly the war in Iran, quickly fed through into higher swap rates and mortgage pricing, unsettling what had been a relatively strong start to the year.
“The impact has been less about affordability alone and more about sentiment.
“Many would-be buyers have taken a more cautious stance in recent months, pausing decisions amid uncertainty and waiting for clearer signals on where borrowing costs will settle in the medium term.
“There are, however, early signs that conditions may begin to ease.
“News of a potential US-Iran deal, alongside softer inflation data this week, should help pull swap rates lower.
Mortgage rates have already drifted back below five per cent in recent weeks as lenders compete harder for business in a quieter market.
“And if swap rates continue to fall, there is scope for borrowing costs to decline further from here.
“If this trend continues, we would expect confidence to gradually return.
“There is clearly underlying demand in the market, but unlocking it will depend on buyers feeling that rates have not just peaked, but are on a stable downward path.”
Contact details are available to account holders.
Create a free account to get in touch with this expert.