Some 74 per cent of mortgage borrowers in the UK are on fixed-rate deals, so would only see a change in repayments when the existing term ends.
The interest rate news came minutes after the announcement that the average household’s energy bill will rise by £693 annually after a 54 per cent increase to the price cap.
The new cap for England, Wales and Scotland will take effect in April and affect 22m households.
Bills for the average customer on a default tariff will rise to £1,971 a year from £1,277; pre-payment customers will see an increase of £708 from £1,309 to £2,017.
Tim Bannister, Rightmove’s property data director comments: “The level of demand we’re seeing from home buyers at the start of the year suggests the rise in interest rates is unlikely to dampen the motivation to move. We’ve seen a real desire from both sellers and buyers to take action and move at the start of this year, and this is likely to outweigh the impact of an interest rate rise on house prices, at least in the short term.
“While the majority of Britain is on a fixed-rate mortgage, for those on a tracker mortgage pegged to the Bank of England base rate, the rise to 0.5% could mean in the region of £40 extra* each month for the average home. An interest rate rises so soon after the last may prompt some in this group to look at fixed rate deals now if they can, or when their current deal ends, in case of rates rise further in the near future.
“For those looking to buy a first home, it’s important to remember that interest rates are still at a level well below historic norms, and there are still many competitive mortgage products out there.”
