Property firms and house builders’ shares have surged following the Bank of England announcing it will hold rates at the same level.
The country’s largest commercial property development company Land Sec has seen shares lift by just under four per cent, following the news.
What’s more, developer British Land saw shares rise by more than three per cent and Taylor Wimpey’s rose around two per cent.
Residential developer Barratt’s shares rose by just under two per cent too, as did Bellway’s.
The decision to keep interest rates at a record low level of 0.1 per cent has come as a surprise, with inflation rocketing.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said it could “turn out to be a short reprieve, with a rate rise set to come at some point.”
Harris added: ‘With the vast majority of borrowers on fixed-rate mortgages, they won’t see any difference to their monthly payments should rates rise. But those on variable rates will see an uplift to their monthly costs, so it is worth planning ahead.”
Simon Gammon, managing partner at Knight Frank Finance, said the move would give borrowers “a little more breathing room, but it is increasingly clear that a rate hike isn’t far away.”
“Borrowing costs are already rising in anticipation and mortgage rates suggest we are entering new territory for large numbers of borrowers. A fifth of all outstanding mortgage debt is at variable rates, which amounts to about £315bn. That’s a lot of borrowers that will soon see an increase in their monthly outgoings.”
“Any rise in the base rate is likely to be small and measured. However, economists are predicting multiple rate rises during 2022, so we are advising borrowers to act quickly, even if they are locked into a deal. Mortgage offers can be held for six months, so it’s worth speaking to an expert to see what’s possible.”