Swap Rates Rise After Autumn Budget Announcement

Following the recent Autumn Budget, swap rates have risen, prompting concerns about potential increases in mortgage rates for homebuyers. According to Excellion Capital, the average 1-year swap rate increased by 0.03% to 4.543%, while the average 5-year swap rate rose by 0.05% to 4.277%. Jonathan Samuels, CEO of Octane Capital, warns that this spike in swap rates could signal higher borrowing costs ahead, particularly as second homeowners face a new 2% increase in Stamp Duty Land Tax. The market's reaction to the Budget has been negative, with investors worried about the government's borrowing plans, which exceeded expectations. Analysts suggest that the rise in rates may be an overreaction rather than a precursor to a sustained trend, but the lack of relief for first-time buyers adds to the pressure. Overall, the combination of increased taxation and rising swap rates could negatively impact the property market and economic growth.