The latest inflation stats from ONS for November show a fall from 6.7% to 4.6% which was more than expected. This means inflation is at its lowest level since 2021.
This is good news for borrowers as it takes the pressure off the Bank of England to increase the base rate. This may lead to reductions over the coming months if the numbers keep improving.
What does this mean for the mortgage market?
This is a continued step in the right direction. Interest rates for mortgages have been reducing over the last few months. Hopefully, we will see rates falling further over the coming months and weeks. Although it doesn’t mean we are going to see a big impact on mortgage rates immediately, we are already seeing movements downwards in the markets lenders secure their rates from. If inflation continues it’s general downward trend then hopefully things will ease over the coming weeks and months. Yesterday a major lender announced rates below 5% for 2 year fixed rates and more are bound to follow.
How can we help?
If you have been delaying a house move or putting off getting on the ladder because of rising costs then now might be the time to call. House prices and interest rates have reduced recently. You may be surprised that the cost of your next move is less than you feared. As independent Brokers we have real time access to rates as they change. If you just want a quick conversation about what your mortgage may look like in the future or you’ve been putting off moving then we will be happy to help you make an informed decision. Contact us here for a chat.
The Bank of England have been raising interest rates to curb inflation, the logic is that people will spend less and save more when prices are high. When this happens prices tend to come down, but remember just because inflation comes down it doesn’t mean prices are. Anything over zero means that prices are rising. With inflation at its lowest level since 2021 this should see the BOE taking the pressure off of homeowners. The last time inflation was this level the BOE base rate was only 0.1%.
Core inflation, excludes the more volatile figures around food and fuel prices, has fallen from 6.1% to 5.7%. Having said this the expectation is The Bank of England will hold the Base Rate again in December.
The fall in inflation in November may speed up the BoE’s reducing of the base rate with many experts predicting it may begin to fall early next year.
The first step is a conversation with one of our experts.
If you’d like to learn more about mortgage products and how we can help you. please don’t hesitate to get in touch with our team. We’re here to help you navigate the ever-evolving world of mortgages and guide you toward a brighter, greener home.