With June’s announcement that UK prices had risen by 2% in the year to May, there was plenty of speculation over whether the Bank of England (BoE) would take the decision to lower its Base Rate following the central bank’s monetary policy committee (MPC) June vote.
However, it was announced that the MPC has voted by a majority of seven to two that it will keep rates unchanged at 5.25% for the seventh time in a row.
The official minutes of today’s MPC meeting state that the decision was “made on the basis of what was judged necessary to achieve the 2% inflation target” – indicating that while the latest fall in UK inflation is welcome news, the BoE and MPC remain cautious in their approach to reducing inflation in the long term.
“It’s good news that inflation has returned to our 2% target,” commented The Bank of England’s governor Andrew Bailey. “We need to be sure that inflation will stay low and that’s why we’ve decided to hold rates at 5.25% for now.”
Although many will feel disappointed that the Base Rate hasn’t fallen this summer, the good news for both homeowners and those looking to buy is that the property remains stable.
Despite Base Rate speculation and the upcoming general election, house prices across the UK remained virtually unchanged in June. Furthermore, according to data from Rightmove, during Q1 2024 the number of sales being agreed between buyers and sellers is 17% higher than in the same period in 2023 – higher than the 12% increase in new buyers coming to market.
Pent-up demand from buyers appears to be continuing to drive a resilient market, where mortgage rates remain higher than in previous years but stable enough to encourage buyers to commit.
“It’s always difficult to predict how home-movers will react to sudden uncertainty, but looking back through our data, we can see that during previous election campaigns, market activity has remained largely steady. This election has followed a similar pattern so far, and the responses from our poll of over 14,000 people also supports the data, with the vast majority of respondents saying they will carry on with their home-moving plans,” says Rightmove’s Tim Bannister.
“However, some potential sellers appear to be watching and waiting rather than taking action, evidenced by a dip in the number of new sellers coming to market, particularly at the top-end. This is understandable when many of these sellers have more flexibility over when they act, but overall, it appears to be business as usual for the mass market.”
Whether you are looking to buy your first home or have an existing mortgage deal that is due to end soon, talking to a mortgage broker can help to make sure you get the best deal. We’ve been pairing clients with their perfect mortgage for over 40 years, comparing the latest rates of 50+ lenders to find the right one for you.
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