THE MIDLANDS PROPERT Y GUIDE MONE YWATCH F INANCE


UP… DOWN… THE MORTGAGE MARKET'S UNCERTAIN DIRECTION OF TRAVEL


46


BoE reduces base rate, lenders increase fixed rates… are you keeping up? If you were to ask a broker how things are going in the mortgage industry currently, they might casually remark, “Up and down” – and it’s a generic expression that couldn’t be more apt, for while the Bank of England has cut the base rate to 4.75%, some lenders are conversely increasing their fixed rates.


The Monetary Policy Committee’s 0.25% cut to the base rate, dropping it back below 5% for the first time since June last year, was widely anticipated, and, while borrowers may welcome it, some uncertainty persists in the market about the direction of travel.


It will help continue the downward trajectory for interest rates, potentially into next year, but a cautionary note.


The focus will be on whether the mood has changed in terms of how sharply rates might fall and whether the path may not be as steep or fall as far as previously expected.


“Most borrowers have continued to fix their rates to benefit from the lower rates they offer when compared with variable rate deals. Counter intuitively, those fixed rates have been nudging upwards despite the cut to the base rate, as the market perception of the inflation and rate outlook has shifted.


Last week’s Budget and the election in the United States, this week, have added a hint of uncertainty around future rate movements. This has already caused a flurry of price changes to feed through, with most resulting in fixed rates being hiked, and will likely continue, unless markets are reassured by the Bank’s decision and funding costs ease back.


In the meantime, lenders will continue to readjust their rates to find the right balance and the level at which the market will settle,


LIVE24-SEVEN.COM


Any borrower agonising over whether to take a fixed rate now should reach a decision sooner rather than later. There are still some extremely sharp rates on offer with some rates still available below 4% but these are bound to be feeling the pressure. We will see how lenders pass through the latest cut to standard variable rates.”


WHAT WILL BE THE IMPACT OF THE BASE RATE CUT?


“A marginal cut in the base rate should boost demand in the economy without spooking the markets.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104  |  Page 105  |  Page 106  |  Page 107  |  Page 108  |  Page 109  |  Page 110  |  Page 111  |  Page 112  |  Page 113  |  Page 114  |  Page 115  |  Page 116