In a month where inflation remains stubbornly high, The Bank of England’s Monetary Policy Committee (MPC) continues to revise monetary policy to meet the 2% inflation target. At its meeting this month the MPC voted to increase Bank Rate by 0.25 percentage points, to 4.5%.
This is the 12th consecutive rise in interest rates. The MPC in its summary, has not ruled out further rate rises to help meet their 2% target in the medium term.
Official bank rate:
Source: Bank Rate history and data | Bank of England Database
Borrowers may be concerned about whether this is the right time to take out a mortgage. Seeking advice is vital to ensure borrowers can comfortably afford to refinance based on their own individual circumstances.
There are however, many positive narratives across the mortgage market this Spring:
Figures from the Office for National Statistics released on the 24th May show that inflation has started to fall, down to 8.7 per cent in April, down from 10.1 per cent in March.
- The Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 7.8% in the 12 months to April 2023, down from 8.9% in March; on a monthly basis, CPIH rose by 1.2% in April 2023, compared with a rise of 2.1% in April 2022.
- The Consumer Prices Index (CPI) rose by 8.7% in the 12 months to April 2023, down from 10.1% in March; on a monthly basis, CPI rose by 1.2% in April 2023, compared with a rise of 2.5% in April 2022.
New buyers, who are vital to keep the market moving will be able to access Skipton’s new product, this May. Called the ‘Track Record Mortgage’, it is the UK’s first 100% LTV Mortgage exclusively for renters. The product will enable renters to access the property ladder without a deposit. Tenants who can evidence affordability for a mortgage and have a strong track record of rental payments can borrow up to 100% of a property value.
House price growth shows signs of stabilisation in April according to the Nationwide house price index:
- April saw a 0.5% rise in house prices after seven consecutive falls
- Annual rate of house price growth improves to -2.7% from -3.1% in March
- The average UK house price is £260,441
As global and economic concerns continue to influence the mortgage market, speak to one of our experienced team today to find the right solution for you. Call us on 020 8154 7280.
Sources:
https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2023/may-2023
Consumer price inflation, UK – Office for National Statistics
Press Release Article – Skipton Building Society
House price growth shows signs of stabilisation in April (nationwidehousepriceindex.co.uk)