Today the Bank of England said it is ‘vital inflation must remain low’ as it choose to keep the base rate at 5 per cent today.
Since the drop in the Bank of England’s base rate earlier this year, further cuts had been anticipated. The Bank’s monetary policy committee (MPC) voted by a majority of eight to one against launching a back-to-back reduction in borrowing costs amid concerns over lingering inflationary pressures.
In response to the Bank of England’s announcement on interest rates, Nathan Emerson, CEO of Propertymark, comments:
“Since the initial rate cut a few months ago, many people will have been closely awaiting any further anticipated cuts, however, it remains crucial the Bank of England continue to implement cuts in a controlled and functional manner, as not to fast reverse the economic progress so far.
“Bearing in mind yesterday’s figures regarding inflation, it is understandable why the decision to hold the base at current levels has been employed. Propertymark remains keen to see full consistency within the wider economy and for any eventual base rate cuts to create a pathway for people that provides long-term stability, confidence and affordability.”
Others say the hold in rate was ‘predictable’ and another cut is likely to happen later this autumn.
Iain McKenzie, CEO of The Guild of Property Professionals comments: “As many economists predicted, we will have to wait until November to potentially see another cut in the rate. Even though the decision was made to keep the rate steady for now, the impact of the previous cut is already being felt as confidence grows in the market.
“Other elements are also pointing to a more positive shift in the market, with demand continuing to strengthen and mortgage approvals in July reaching their highest level in almost two years. Transaction levels have also steadily recovered, up 6.7% year-on-year in July. With many of the major lenders reducing their mortgage rates in response to the previous cut, we expect to see activity in the market warm, as the temperature drops and we move into the colder months.”
Nicky Stevenson, Managing Director at national estate agent group Fine & Country, comments: “Despite the decision to keep rates where they are for now, the UK property market is poised to see an upswing in activity this Autumn. There has been an increase in supply, as well as heightened buyer and seller activity, and a renewed confidence following the previous cut in rate.
Commenting on today’s announcement to hold interest rates, Samantha Lindsay – Mortgage and Protection Adviser of My Mortgage Angel, says it’s the right decision and provides stability as we head into the busiest month for buying and selling property:
“It would have been nice to see a drop today, but holding is the right decision. With inflation remaining steady, keeping interest rates as they are provides the stability everyone needs, particularly as we are now in one of the busiest months for buying and selling property.
“While it might feel like interest rates are still higher than we want them, homeowners must remember that prior to 2022, the average interest rate was 5.62%. The highest point was in 1998 when the average rate reached 8.87%, and in 2021 the average rate dropped to 3.59%. We are on a downward trajectory for the average rate, but rate drops will be slow. For those wanting to move but are sitting on the fence, waiting for further reductions, buy with your heart – the right time to buy a new home is when it is right for you and your family.”
Some say the news of a rate hold will be ‘disappointing for many aspiring homeowners’ that were hoping rates would inch downward and encourages optimism for the months ahead.
Robin Rathore, CEO, Bamboo Auctions, comments on today’s decision to hold interest rates:
“With inflation remaining steady, the Bank of England is sensible to hold interest rates this month.
“The news will be disappointing for many aspiring homeowners that were hoping the rates will nudge down, but those looking to move need to remember that a mortgage is still one of the cheapest ways to borrow money.
“September is a particularly busy month for selling property so this could be the perfect opportunity for buyers to find their dream home. If they buy through auction, you could also still be in before Christmas!”
