Overall Market Backdrop, June
- On 22nd June the Bank of England (BoE) raised rates to 5%, with a surprise 0.5% increase (compared to market expectations of 0.25%).
- The BoE’s rate hike and associated movements in the UK gilt yield and swap curves (on which mortgages are typically priced) contributed to further increases in the price of fixed-rate mortgages in the UK.
- Resulting from a combination of factors including rapidly increasing borrowing costs, and changes post pandemic regarding employees’ relationships to working in the office, the commercial real estate industry has also been experiencing continued pressure.