It’s been an incredibly busy week, with the action beginning on Monday with the Chancellor’s latest Budget bringing a positive outlook on the state of the UK economy.
There was also further good news for first time buyers with Stamp Duty abolished for all first-time buyers of shared-ownership properties up to £500,000. This will be applied retrospectively from the date of the last Budget.
In mortgage market news, approval numbers reached a seven-month low in September 2018, after a reported rush to get approvals through before August’s interest rate rise.[i] Therefore, it wasn’t a huge surprise when the Governor of the Bank of England, Mark Carney, announced today that interest rates will be held at 0.75%.
The story so far
It was a year ago that the Bank of England announced the second interest rate rise in a decade, followed by another rise three months ago. Although still low by relative standards, 0.75% is the highest interest rate the UK has seen since March 2009.
The Bank of England has given repeated assurances that any further rises would be at a slow and steady pace, echoing the pattern of rate rises in the US.
The question is; when will we see another interest rate rise?
The BoE will be looking closely at all the economic forecasts. GDP grew by 0.7% over the summer months, but there is concern that growth flat lined in August.[ii] However, Chancellor Philip Hammond’s Budget upgraded 2018’s economic growth figure from 1.5% to 1.6%.[iii]
With Christmas looming, it would be a big surprise if rates rise again in 2018. Of course, Brexit will play a huge part in any decision and if Britain crashes out of the EU with no deal, the BoE may be forced to raise rates to defend the pound.
No rate rise until 2019
Long term, the BoE doesn’t expect the base rate to hit 1.5% until 2021.[iv] If economic growth continues as forecast, our best estimate would be a rate rise towards the end of Q1 2019.
Our team is on hand to advise
The sooner you act, the more time you have to consider your options. If you’re looking to secure a mortgage, remortgage, or restructure your borrowing in any way, always think to the long term.
Did you know – if your current mortgage product is ending in the next six months, you can book a fixed rate remortgage product now?
We have access to lenders whose offers are valid for up to six months, meaning you can access today’s most competitive remortgaging rates, free from any worries about rate rises until early 2019.
Get in touch
Talk to a broker with a strong network and access to a wide range of lenders to ensure you’re getting the best of what the market has to offer.
If you would like to arrange a free initial consultation, please call us on 0207 519 4985. Alternatively, you can send us an email to speak to one of our experienced Mortgage Managers.