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Published on : June 22, 2023 12:37

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Rising Rates: How Are They Impacting The Housing Market?

The recent announcement of an interest rate rise has sparked concerns and questions about its impact on the housing market.

As the cost of borrowing increases, those looking to buy a property may be wondering whether it’s still a good time to enter the market.

Colin Mellor To shed light on this topic, we turned to our CEO, Colin Mellor, our resident fountain of knowledge with over 40 years of industry experience.

He’s here to provide insights into the emerging trends of the past year and help us understand the effects of rising interest rates on the housing market.

The Shift in Buyer Focus

“Over the last twelve months, we’ve seen a noticeable trend emerge in the housing market. Once individuals decide to buy a property, their main focus becomes finding an affordable location.

Interestingly, even as interest rates have risen, we’ve observed buyers changing their area of preference rather than abandoning their decision to buy.

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This shift in focus can be attributed to a comparison between the rising costs of renting and the increasing mortgage expenses.”

The Value of Homeownership

“Whether you’re considering renting or buying a house, it’s important to note that homeownership still holds significant advantages.

As long as you have a deposit saved, purchasing your own home remains a favourable option.

Despite the interest rate increase, rental costs have also been on the rise, often surpassing the impact of higher rates.

Therefore, if you have the means to secure a deposit, buying a house is likely to offer greater stability and long-term value.”

Predictions on House Prices

pound coins with small plastic red house

“Contrary to initial expectations, we haven’t witnessed significant decreases in house prices. This can largely be attributed to the balance between the number of buyers and sellers in the market.

The latest interest rate increase is not expected to drastically alter this equilibrium. Homeowners who are currently benefiting from lower rates and have no immediate need to move are unlikely to do so.

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As a result, the supply of houses for sale is not expected to see a significant increase, making a substantial reduction in house prices unlikely.”

Stable Housing Transactions

“Whilst we have not seen rates at this level for over 15 years, which is clearly a significant borrowing cost increase, let’s not lose sight of the fact that during the years prior to that, interest rates were a great deal higher, yet the housing market continued to prosper.

Moreover, there are now far more funds available for borrowers to access, along with much greater flexibility on loan periods, even up to 40 years.”

Expert Mortgage Advice

Professional Mortgage Advice

If you find yourself in need of guidance on new mortgages or if your fixed-rate deal is coming to an end, we’re here to help.

Our dedicated mortgage helpline is staffed with qualified advisors ready to assist you in navigating the changing landscape.

Give our team a call today at 0161 443 4830 to discuss your options and find the best solution for your needs.


While the recent interest rate rise has raised concerns about its impact on the housing market, a closer look at the trends and factors at play reveals a more nuanced picture.

Despite rising costs, the value of homeownership remains strong. With rents increasing alongside or even surpassing interest rate rises, buying a house, provided you have a deposit, continues to be an attractive option.

As the number of buyers and sellers remains relatively balanced, significant decreases in house prices are not expected.

Overall, the housing market is anticipated to maintain stability. If you need guidance in navigating the changing mortgage landscape, our qualified advisors are ready to help.

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Related Links

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*Your home may be repossessed if you do not keep up repayments on your mortgage.

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