Bank of England’s rate hold
The Bank of England has held interest rates at 3.75% for the sixth consecutive time.
Matt Smith, Rightmove’s mortgage expert, says:
“The Bank of England’s decision to hold the base rate will come as welcome news to mortgage borrowers, particularly those on tracker mortgages whose monthly repayments move in line with changes to the base rate. However, today’s decision is unlikely to remove all uncertainty for home-movers.
“Mortgage pricing is influenced by a range of factors beyond the Bank Rate alone. Fixed-rate deals tend to reflect market expectations in advance, and recent increases in the underlying cost of funding these products mean that lenders will continue to adjust mortgage rates, despite today’s hold.
“Financial markets are still pricing in the possibility of further base rate increases in the months ahead, which means borrowers shouldn’t necessarily view today’s decision as a signal that mortgage rates have reached their peak.
“For those looking to move, the most important thing remains understanding what they can comfortably afford and keeping a close eye on the range of products available. While today’s announcement provides some short-term stability, future expectations and wider economic uncertainty will continue to play an important role in mortgage pricing and home-moving decisions.”
Nathan Emerson, CEO at Propertymark, comments:
“When considering the wider economic pressures currently in focus, it is positive news to see the Bank of England’s Monetary Policy Committee take the decision to maintain the base rate at 3.75%.
“With a backdrop of continued global unease, many aspects of the housing market have become substantially more subdued than normal, with consumers rightly acting with a greater degree of caution before committing to longer-term and high-value borrowing.
“It will be a case of closely watching what might be announced in the Autumn Budget next month, particularly concerning housing and what support may be offered to first-time buyers, for example.”
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