Bank of England holds interest rates at four per cent

Following the announcement that the Bank of England has held the base rate at four per cent, Ben Thompson, deputy chief executive at Mortgage Advice Bureau commented:

“It’s no surprise that the Bank of England has acted with caution, choosing to hold the base rate at four per cent.

“This decision breaks the streak of quarterly rate cuts, and with the autumn Budget fast approaching and meaningful tax rises likely to be imminent, the Bank is clearly waiting for certainty on the inflationary outlook before making any further moves. Homebuyers and movers should therefore anticipate a stable rate environment for the time being.

“While the headline rate may feel elevated, the reality ‘on the ground’ is much more encouraging. Three years of economic adjustment have delivered a much brighter picture: house-price growth has flattened, wage growth in real terms is on the rise and borrowing power is significantly better than it was 12 to 24 months ago. With lenders offering a wealth of innovative products, there are countless opportunities for prospective buyers to secure a competitive deal.”

He added: “Whatever your homebuying plans, the message is simple: don't delay. Playing the waiting game for one or two marginal base-rate cuts is a gamble.

“If the economic confidence that the Bank is waiting for truly takes hold, a surge in demand could see house prices accelerate quickly. This essentially means that any small savings made on a lower mortgage rate would be eaten up by a higher property price. If you're thinking of buying or moving, now is the time to act before market momentum returns fully.

“As always, the importance of speaking to a mortgage broker cannot be understated, as they can provide bespoke guidance based on your financial circumstances and help you navigate the current market to secure the right deal.”

www.mab.org.uk