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Bank Base Holds Firm But Enters New Phase


Let’s be honest, I am sure no-one expected to see that the Bank of England Monetary Policy Committee, (MPC), had suddenly raised rates from their current 0.5% level, although some commentators have been a little jittery with inflation nudging 3%.

What is more interesting is that not only have the MPC decided to take a pause in their campaign of Quantitative Easing, £200 billion seems to have been enough of a spending spree for now at least, but you could argue that Bank Base has now entered a new phase – I call it “the expectation phase”. This is where many people expect a change but are not quite sure when and it is this expectation that can be a driver for all manner of decisions.

We are entering an interesting phase which, to nick a famous phrase off Sir Winston Churchill, may be looked back at as “the end of the beginning”. Whilst we may have tripped half-heartedly over the recession line into some semblance of growth, to see how strong the economy really is we need a period of time without artificial stimulus.

As the end of QE, the car scrappage scheme, VAT concessions, etc, begin there are some real concerns that we may see the infamous “double-dip” which everyone is so desperate to avoid.

However, the end of the beginning is a momentous occasion, and whilst things will remain tough for the remainder of the year, the positive signs and shifting in attitudes is everywhere to be seen.

In the property market, respected Estate Agents such as Douglas & Gordon have taken on 70% more instructions than they did in January last year. In fact, as Ivor Dickinson writes, “we actually took on the highest number of instructions in a month since March 2008, two years ago.”

Whilst stock shortages are still an issue for agents, many more are starting to see signs of improvement. This is much needed, as demand still remains high. Again, taking D&G as an example, last month they “registered the most number of applicants since January 2007”.

This has a clear implication for house prices, with many properties especially in the most desirable locations having already made up any ground they lost in the preceding couple of years.

Mortgage lenders are also finally getting in on the act with reports yesterday that almost 1,000 new mortgage products hit the market in January, the biggest increase for over a year.

We have also seen a massive rise in enquiry levels, from purchasers wanting to take advantage of low rates and competitive house prices, to remortgage customers looking at fixing before variable rates inevitably rise.

With mortgage rates now as low as 3.39% for a 2 year fixed, (5.8% APR), or 2.39% for a 2 year tracker rate, (5.6% APR), this does not come as a surprise.

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Andrew Montlake

Written by Andrew Montlake

Andrew Montlake, better known as Monty, began his journey with an Hons degree in Economics & Politics before starting in the mortgage industry in February 1994. As a main founder of Coreco in 2009, he successfully grew the brand, marketing, and communications, and was made MD in 2019 focussing on the overall vision, strategy, and culture of the company. As Coreco’s media spokesperson, Andrew can often be seen or heard on TV and radio as well as regularly commenting in the national, local, and trade press. He is the author of this acclaimed Mortgage Blog and is well-known for his social media, podcasts, and public speaking. Andrew is now proud to serve as Chairman of the Association of Mortgage Intermediaries, (AMI) as a cheerleader for the Mortgage Industry as a whole and continues to work at the coal face, writing mortgage business and advising clients.

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