In our previous newsletter we covered the Bank of England’s decision to hold rates at 5.25% signalling rates may stay elevated for longer than predicted.
Since then we have seen inflation data for January remaining steady at 4%, which sparked some hope of earlier rate cuts.
However, recent data from both the domestic and international markets, suggests that such reductions may not materialise until at least June, with some economist not expecting any rate cuts until August.
Mortgage Lenders Increase Rates
With mixed data and tensions rising in the Middle East, many lenders are now increasing rates whilst they wait on clearer signals from the BoE, whose next policy meetings are set for 21 March and 9 May 2024.
Many lenders have either pulled rates or moved them higher. At the moment HSBC is set to become the only mortgage lender left offering rates below 4 per cent, with Santander increasing the cost of its loans today with rates up by up to 0.34 percentage points.
However, although rates have temporarily increased, experts do still expect them to fall again later this year, if the Bank of England cuts interest rates, as it is expected to do in summer.
What Borrowers Should Do
Given the nature of the market, borrowers should act as quickly as possible to secure a suitable deal. While the markets still anticipate a reduction in fixed rates, the timeline for rate cuts are unknown and might take longer to occur than initially expected.
It is important to note that, even if you secure a deal, there is still flexibility visa our FlexiLock service to make changes, close to completion should a more favourable offer become available
Speak to our award winning mortgage brokers
Whether you’re considering buying a new property, remortgaging, or just seeking advice on the best course of action in this volatile market, our team is here to assist you.
Get in touch now on 0208 364 3444 alternatively click here to schedule a free consultation call. Be sure to ask about our Flexi-Lock service to ensure you can lock in the best rate.
New government rules on short-term lets
The government has announced new regulations on short term holiday lets, but critics have said the restrictions will not go far enough to address the severity of the issue in London.
New rules set out by Minister for Housing Michael Gove will stipulate that property owners will need to seek planning permission from the local council if they plan on renting out their home(s) on a short-term basis.
This will only apply to homes that are rented out for more than 90 days of the year.
A national register of short-term lets will also be set up for local councils to refer to.
“We know short-term lets can be helpful for the tourist economy, but we are now giving councils the tools to bring them under control so that local people can rent those homes as well,” said Gove.
Home valuation requests hit new record
A record number of future sellers started to get their 2024 moving in January by sending requests to estate agents for an expert in-person home valuation.
According to Rightmove data, the number of requests were 23% higher in January 2024 than the previous record in the first month of last year.
One of the factors behind the uptick in activity among home-sellers and potential buyers is the more stable mortgage market, which has remained calm at the beginning of the year.
In January, the number of new properties coming to the market for sale is 13% higher than last year, while the number of future buyers sending enquiries to estate agents is 7% higher.