By Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “With inflation dipping to 3.4 per cent, speculation is growing as to when the Bank of England will start cutting interest rates. It is time for the rate setters to be bold and start reducing rates at the next meeting, increasing borrower
confidence and giving the housing market a welcome boost.
“The evidence suggests we are edging closer to a rate cut. At the last meeting, six members of the Monetary Policy Committee voted for no change in rates, two wanted an increase and one a rate reduction. This time around, eight voted to hold rates, with one voting for a quarter-point reduction.
“We expect base rate to be close to 4 per cent by the end of the year, assuming inflation continues to move towards its 2 per cent target. This would come as welcome news for borrowers struggling with affordability.
“As far as mortgage pricing is concerned, what the Bank of England does with base rate is only part of the picture. If Swap rates, which underpin the pricing of fixed-rate mortgages, edge further downwards, then lenders will introduce cheaper mortgage rates, increasing the choice for borrowers at more palatable pricing. Lenders are certainly keen to lend and want to do more business after a disappointing 2023.”
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