Housebuilders tumble on FTSE 100, mortgage rates fall below 6pc for the first time since July

The FTSE 100 experienced a decline as investor outlook was negatively influenced by the anticipation of prolonged higher interest rates.

The premier index of the UK, the FTSE 100, witnessed a 0.4pc dip, while the FTSE 250 saw a reduction of 0.2pc, primarily influenced by a drop of more than 1.7pc in interest rate-sensitive homebuilder stocks. Barratt Homes emerged as the most impacted, experiencing a 6.3pc decline as it traded ex-dividend.

Additionally, the FTSE 100 faced pressure due to a 6.1pc decrease in shares of Phoenix Group. This followed a slight increase in the life insurer’s semi-annual adjusted operating profit.

Mortgage rates fall below 6pc for the first time since July

The decision of the Bank of England to maintain interest rates at 5.25pc is continuing to permeate the market.

For the first time since July, the average rate on a five-year fixed has descended below 6pc, as reported by Moneyfacts. The rate has reduced to 5.99pc, slightly down from 6.03pc on Wednesday.

Matt Smith, a mortgage specialist at property website Rightmove, remarked:

With the encouraging news on inflation and the Bank’s choice to sustain the base rate, we’ve observed a stabilization in swap rates, which are the foundational costs of fixed-rate mortgages.

A significant insight from the previous week for prospective mortgage applicants is that the prevailing market view is now leaning towards the belief that the base rate has reached its zenith. However, there persists a diminishing yet notable risk of witnessing a further increase this winter.

As we step into the last quarter of the year, the expectation is for the continuation of stability in the mortgage market, with rates on a consistent downtrend and an increasing number of lenders likely to propose deals below 5pc.

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