Rates decision next week, What to expect.

As we enter spring and eventually summer, what can we expect for mortgage rates? With inflation appearing more under control will the Bank of England start to cut rates and when will this filter through to the mortgage market? The rates decision is next week, what can you expect to happen?

Falling Interest Rates

The trend of decreasing interest rates has recently stalled and some lenders this week have even increased some fixed rates for clients. Lenders price their fixed rate deals based on the Sonia swap market, this rate is affected by not only market sentiment but also the supply and demand of money. Some of the increases can be put at the door of an increased demand for money but generally the markets’ inflation outlook would be the main driver. Once inflation is under control, the Bank of England should start cutting rates.

The next Bank of England meeting is next Thursday 9th June which may come too soon for any changes, the next inflation news is due on the 19th June and is expected to be positive following reductions in energy costs.

We think their is unlikely to be much change in rates over the next few months and commentators expect rates to start falling toward the end of the year. The base rate is currently 5.25% and commentators are predicting it will only reduce to 4.75% by the end of this year.

So where are we compared to a year ago?

The rates available are generally fairly equivalent to 12 months ago. House prices have however fallen, London & the South East has seen the largest falls. This effectively means that housing is more affordable than 12 months ago.

Should I wait?

This is a difficult question to answer and depends on what you are waiting for. Some clients who have held off renewing fixed rates in the last few months have found that the rates now available are slightly higher. Our recommendation would be to “lock in” a rate at your earliest opportunity (normally 6 months prior to your rate ending). We then monitor the market for you and will recommend a new rate should they fall.

If you are putting off buying for the first time or moving house then waiting may well see you secure lower rates in the future. As rates reduce then market activity will pick up, more buyers means more competition. This could see the cost of the house you want to buy increasing again. Would the cheaper rates outweigh a higher purchase price?

More Options for Clients

Lender competition recently has created a more borrower-friendly landscape. With more financial institutions vying for business, clients of Prospect Tree Mortgages can benefit from a wider array of mortgage products and competitive rates. This increased competition empowers clients to explore diverse options, ensuring they find a mortgage solution that aligns perfectly with their unique financial goals and circumstances.

Prospect Tree Mortgages: Your Trusted Partner

At the heart of these positive trends is the highly skilled and motivated team at Prospect Tree Mortgages. Our experts are committed to navigating the evolving mortgage landscape on behalf of our clients, ensuring they capitalize on the opportunities presented by falling interest rates, stabilised property prices, increased market activity, and heightened lender competition.

With a focus on personalised service and a deep understanding of the market dynamics, the Prospect Tree Mortgages team is dedicated to guiding clients through a seamless and successful homeownership journey. Whether you are a first-time buyer, a homeowner considering refinancing, or someone looking to leverage the market’s positive trends, our team is here to provide tailored solutions that meet your specific needs.

Get expert advice before making any decisions

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.