June’s 0.5% base rate increase added to the financial pressure on borrowers, who faced rising mortgage costs on top of high inflation. But, falling house prices were welcome news for buyers that are able to afford current interest rates. Here’s our summary of what you need to know about the housing market this month.


Interest rates rise again, squeezing borrowers further

The Bank of England increased the base rate of interest from 4.5% to 5% in June, in an attempt to control inflation, which had been expected to fall but remained stubbornly high at 8.7%.¹ Lenders responded by pulling mortgage products from the market, limiting the choice of deals available for borrowers.

Analysts now predict that the Bank of England will need to increase the base rate to 5.5% to have a meaningful impact on slowing down inflation. The base rate is one of the Bank’s only available tools to do this – in theory, higher interest rates should encourage people to save instead of spending, bringing down inflation.

We’re here to help through this challenging time. Whether you’re on a tracker mortgage, or your fixed deal is coming to an end, now might be a good time to chat to a mortgage broker. They can give you a personalised recommendation, based on your situation and the rates available to you – not just the “average” rates quoted in the headlines. Also, you can lock in a new rate from as early as six months before your current deal ends.


Lenders approve more mortgages in May

Mortgage approvals for UK house purchases increased from 49.0 thousand in April to 50.5 thousand in May.² While it’s great to see lending levels increasing, it’s not guaranteed that this trend will continue, as these numbers predate the June base rate increase.

It’s impossible to predict or time the housing market – and we don’t recommend trying to. No matter what others are doing or the headlines are saying, the right time to buy is when you’re ready. If you can comfortably afford your repayments and you’re planning to buy a home you can live in for years, there’s no reason to put off your plans.


Falling house prices bring a silver lining for buyers

Rising rates have fed through to house prices, so it’s not all doom and gloom – if you’re in the market to buy a home, you might be able to get a discount. Nationwide’s House Price Index reported that house prices fell by 3.4% in the year to May, marking the biggest annual decline for nearly 14 years.

But, according to the UK House Price Index, house prices grew by 0.5% in April compared to March.³ If you’re wondering why this data tells a different story, it’s helpful to remember that all the indexes work differently. Here’s a quick refresher:

  • Rightmove’s House Price Index reports on asking prices – the prices set by sellers and estate agents at the point when properties are advertised. Not all properties sell for the asking price, so this index should be taken with a pinch of salt.
  • Nationwide and Halifax have their own house price indexes, which they base on agreed prices for house purchases involving mortgages. This is a more accurate measure of the market, but it’s not a full picture, as it doesn’t include things like cash buyer transactions.
  • The UK House Price Index covers sold prices for all UK house purchases which have completed and been registered at the Land Registry. There’s a two-month reporting lag on this index, as it takes time for these transactions to feed into the database. It’s an extremely accurate picture, but not the most up to date.


Closing thoughts

We always like to end our updates with a good news story, and this month’s silver lining is that savings rates are increasing, including the rate on our Cash Lifetime ISA. Coupled with the 25% government bonus, this could be a great moment to take advantage of the Lifetime ISA and boost your deposit, so that you’re in the best possible position – whenever you’re ready to buy.


We know it’s a stressful time to be a homeowner or a home-buyer, so we’re here to help. The experts at Moneybox Mortgages can show you your options and help you make a plan. With over 90 lenders to choose from, they can give free mortgage advice, help you find the right mortgage for you in the current market, and get your application underway.


Got a question about something we’ve not covered here? Send a message to  and we’ll look to include a reply in future updates.


¹ Source: Office of National Statistics (ONS) CPI Annual Rate of Inflation

² Source: Trading Economics, UK Mortgage Approvals for May 2023

³ Source: GOV.UK Land Registry (UK House Price Index for April 2023)

Moneybox Mortgages is provided by Moneybox Mortgages Ltd.

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