The Bank of England is set to raise interest rates for the 14th consecutive time this week in a move hoped to fight inflation. Rates look set to reach 5.25%, the highest since 2008.
The monetary policy committee are expected to meet on Thursday 3rd August. If they back another increase, it is expected to be lower than June’s 0.5% jump. A more measured 0.25% increase to the base rate would be a response to lower than expected core inflation. Core inflation does not take food and energy into account and fell back to 6.9% recently, compared to 7.1% in May – a 30 year high.
Interest Rate Rises and the Housing Market
Forecasters expect that the Bank of England is reaching the end of the interest rate hikes, with the rate thought to top out at 5.75% by the end of the year. This projected stability has already led to some lenders reducing mortgage rates and offering better fixed term deals, as they have factored in the latest rises to their calculations. In term, competition is driving a more attractive market for borrowers than we have seen since the cycle of interest rate rises began in December 2021.
HMRC data indicates that homebuyers have been returning to the housing market after a turbulent period of late. This has put fears of a collapse in prices to rest.
If you are looking for conveyancing services to take advantage of lower mortgage rates, contact us now. We have offices in Aldershot, Birmingham, Leicester and London and work with individual and corporate clients across the UK.