As predicted by the markets, the Bank of England increased the base rate of interest from 5% to 5.25% last week, its 14th consecutive increase, and Huw Pill, BoE chief economist, indicated that rates were likely to stay high for a prolonged period.
However with positive inflation figures and improvements in swap rates, we are starting to observe a welcome trend of market stabilisation.
Many lenders are taking proactive steps to reduce rates across both fixed and new mortgage products. This is undoubtedly positive news for borrowers seeking stability and favourable terms.
High street lenders are leading the charge by making significant efforts to accommodate borrowers’ needs.
Nationwide has declared that they’ll make a substantial 0.55% reduction on selected fixed rate products today, with lenders like HSBC and TSB announcing they’ll make further reductions tomorrow, reflecting their commitment to supporting borrowers.
Concerns for Borrowers on Tracker Mortgages
We recognise that there are areas of concern, particularly for those on tracker and standard variable mortgages. Borrowers with these mortgage types have experienced consistent rate rises and they’re likely to be on noncompetitive rates. For example The specialist lender Aldermore has recently increased their variable rate to 9.73%.
Unlocking Savings for Variable and Tracker Mortgage Holders
For those of you currently on variable or tracker mortgages, we strongly encourage you to get in touch with our mortgage brokers so that we can conduct a review of your current situation and explore the potential for a more competitive deal.
For mortgage help and advice please feel free to contact our team on 0208 364 3444 or click here to schedule a free consultation call.
Market remains stable after latest BoE rate rise
The market has remained relatively calm since the Base Rate increase, and those looking to take out a mortgage soon will be hoping this period of stability continues for as long as possible.
This is according to Rightmove’s mortgage expert Matt Smith who adds: As expected, despite the base rate rise, fixed-rate mortgage deals have continued to tentatively trend downwards and based on the latest swap rates, are likely to continue to do so slowly, barring any market surprises.
“A settled market provides more confidence and certainty and next week’s inflation data will be key to setting the tone for the following weeks. If some positive news means confidence can continue to build, lenders may feel they can get more competitive with their rates to attract the many motivated buyers still in the market to move.”
UK house prices fall for 4th consecutive month
UK house prices fell 2.4% in July compared to the same period a year ago, but this was at a slightly slower pace thanks to a rise in activity from first-time buyers.
According to Halifax’s house price index, the average property price stood at £285,044, a 0.3% drop on the previous month, and a fourth consecutive monthly decline.
The fall is equivalent to a price drop of around £1,000 in cash terms, and compares to a peak of £293,992 last August. In June prices declined 2.6%, from 1.1% in May.
The South East of England was the area where house prices faced the most downward pressure, down 3.9% on an annual basis. Greater London also mirrored the trend, with average house prices falling 3.5% to £531,141 annually in the capital.