In a much-needed boost for the property market, and for mortgage holders alike, the Bank of England Policy committee today voted to keep the Bank of England base interest rate at 5.25%.
This halt in the trend of quarter of a % rate rises, will provide some light relief to those about to remortgage, or looking to enter or move up the property ladder following 14 consecutive rate rises.
It had been widely anticipated that the committee would vote to raise the Base Rate by another 0.25% but following unexpectedly positive inflation results for August, announced by the Office for National Statistics yesterday, the rate has remained unchanged.
Inflation has been expected to rise but actually dropped 0.1% to 6.7% for the year to August and core inflation dropped yet further to 6.2%, despite increasing prices at the fuel pumps.
So, what does this all mean for the property market? Well, your guess is as good as mine.
The North East property sector remains fairly steady, with house price values not dropping like our Southern counterparts, thus supply and demand continues to be there, which is positive.
In addition to the above, we have seen the first sub 5% mortgage rate this week for a five year fixed product, which is further good news for the markets.
The five year futures bond market is now dropping below 5%, which in turn is seeing the average mortgage rate fall back for the first time in many months.
Hopefully, this trend will continue and we will start to see a normal high street lender rate for a five year fix approach the 4% mark by the close of this year.
All in all, it has been a tough time for everyone in property. It’s too early to tell if this is the light at the end of the tunnel, but what we can say is that it’s been a positive week for those in the property market and home owners alike – long may it continue.
If you are affected by the above, get in touch and we can guide you through to help make the buying and selling process as simple as possible. Furthermore, if you need help in obtaining a new mortgage deal or want to be put in touch with a reputable agent or surveyor then we do know a number of the same whom we would be happy to pass you onto.
By Jonathan Wall, Partner – Head of Residential Property and Private Client Services
