The Bank of England’s Monetary Policy Committee will decide on 4 November whether interest rates will finally rise, after the record low of 0.1% that has been in place since March 2020. In simple terms, a rise in interest rates will mean that borrowing becomes more expensive for those buying property, whether they’re purchasing for their own use or as a buy-to-let investment.

However, the real picture is more complex with the mortgage market already shifting, even on the rumour of an imminent rate rise. Barclays, Halifax, Lloyds and Nationwide have already announced interest rate increases for many of their mortgage products, in anticipation of the Monetary Policy Committee’s decision.

“There’s a clear temptation for first-time buyers and investors to take up the opportunity of low borrowing rates while they still can and lock in a rate for the next three to five years. However, doing so isn’t risk-free. Property prices may cool down slightly once the interest rate goes up, which means buyers could potentially get a better deal if they wait. It’s a tough call.”

Dale Anderson, Managing Director, Fabrik Invest

So, will the market cool? According to the team at Fabrik Invest, it’s not out of the question, but a slowdown seems, on the whole, unlikely. The UK has a fundamental and sustained shortage of homes – a shortage which looks set to worsen as the price of building increases sharply due to inflation.