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Interest Rates Steady

08.07.19

Given the coverage, you would be forgiven for thinking that Boris Vs Hunt is the greatest showdown in political history as they battle publicly for votes from a mere 160,000 people.

It’s more like a battle between Basil Fawlty and Blackadder with many a “cunning plans” to woo the voters and convince them that they can negotiate a magic unicorn out of Brussels. One of Boris’s plans is to substantially cut Stamp Duty which could have a really interesting effect on the market.

Meanwhile, the latest meeting of the Bank of England Monetary Policy Committee saw no change in interest rates again, but more than this they cut their outlook on UK growth due to Brexit uncertainty and general trade arguments.

This means that it is now unlikely that we will see an increase in rates at all this year. As a result of all this, we have seen the cost of funds decrease accordingly which means lenders could if they wanted, cut rates even lower. However, cutting rates further is not what lenders want to do as the rate war itself has got to a point where taking things too much further is not in anyone’s real interest.

We need innovation, criteria and affordability changes and some fresh and exciting products rather than cheaper rates.

It was also interesting to note that at least three different Bank of England reps have been at pains to say that once there is some certainty back in the market, rates will have to rise quicker than many people think to stop the economy overheating.

The quandary is clear. Do you buy now on the basis that post any semblance of certainty both rates and prices will rise, or wait and see if rates and prices have to fall because we mucked up everything? As an optimist, I still say the former rather than the latter and really do feel that those putting things on hold now will see a house price bounce post anything certain.

Rate wise, for standard residential mortgages, borrowers can obtain 2-year fixes at 1.35%, (3.84% APRC) and 5-year fixes from 1.75%, (3.62% APRC) whilst variable tracker rates are around from 1.29%, (3.82% APRC).

Those looking at Buy-To-Let can still obtain products from just 1.41%, (4.86% APRC) for a 2-year fixed, or 5-year fixes are available from 1.94% (4.06% APRC).

Your home may be repossessed if you do not keep up repayments on a mortgage or any
debt secured upon it.

A fee of up to 1% of the mortgage amount may be charged depending on individual circumstances.
A typical fee is £495.

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