Base Rate increases have had no impact on business, say over two thirds of brokers. Nearly half expect the Base Rate to be 1.0% by the end of 2019.

More than two thirds (68%) of brokers responding to United Trust Bank’s most recent broker sentiment survey believe that the two Bank of England Base Rate increases seen since November 2017 have had no impact on their business.

The Base Rate currently stands at 0.75% following an increase from 0.50% on the 2nd of August this year.  The rate was increased from 0.25% to 0.50% on the 2nd of November 2017.

UTB’s survey, carried out amongst over 100 brokers operating in the property and asset finance sectors, also found that 16% of brokers felt the two increases had had a positive impact on their businesses as opposed to 16% who felt they had had a negative impact.

However, when asked what impact the increases have had on the UK’s residential property market over the last 12 months, 27% believed the effect had been negative.

What impact have the two Base Rate increases had on the UK’s residential property market in the last 12 months?


Neutral 64%
Negative 27%
Positive 9%

The survey also asked brokers to predict what the Base Rate would be at the end of 2019. Nearly half (46%) expected one more increase of 0.25% between now and the end of 2019 taking the Base Rate to 1.0%. 12% expected the rate to fall.

What do you expect the Base Rate to be at the end of 2019?


0.25% 1%
0.50% 11%
0.75% 18%
1.0% 46%
1.25% 17%
1.50% 6%
Higher than 2% 1%


 Harley Kagan, Group Managing Director – United Trust Bank, commented:

“It is encouraging to see that for a majority of brokers the two Base Rate increases have had little to no impact on their businesses over the last 12 months. I believe the same is broadly true from a lender perspective although expectations of higher mortgage rates to come may have been a contributing factor to a general cooling of activity in the residential property market. Developers and housebuilders need to be mindful of future demand and pressure on pricing when planning future projects and that, coupled with Brexit uncertainty, is causing some to take their foot off the gas with new starts.

“The Base Rate has been less than 1.0% for the best part of 10 years. Originally a measure to stave off the worst effects of the financial crisis, for many, and especially the latest generation of consumers and borrowers, ultra-low interest rates are now the norm. As such it doesn’t take much of an increase to inject some nervousness into the market, especially for First Time Buyers.

“However, a return to the interest rates seen before the credit crunch seems unlikely. Whilst a 5% Base Rate appeared reasonable in 2008, the PRA recently challenged the resilience of banks and other lenders using a 4% Base Rate for stress testing, an indication perhaps of what they believe would be an extraordinary interest rate for the current economic environment. Hopefully, once the nature of our future relationship with the EU is clearer and uncertainty in the economy is replaced with stability, buyers will be back in even greater numbers and housebuilders will be more encouraged to get on with tackling the UK’s inherent housing shortage.”