14 December 2023
If you are covering the latest interest rate decision from the Bank of England and how it impacts mortgages, please see the following comment from Karen Noye, mortgage expert at Quilter:
"The Bank of England's decision to maintain the interest rate at 5.25% is a significant move with multifaceted implications for the UK economy but by and large it should spell good news for mortgages and the housing market.
"For the housing market, this pause in interest rate hikes may boost confidence. More certainty over mortgage costs breeds higher buyer confidence and property market activity. More potential buyers should start to feel confident about entering the market, potentially sustaining or even boosting housing prices. Recent house price indices have shown that as a result of limited housing stock prices have modestly increased.
"However, the broader economic context remains challenging. The ongoing cost-of-living squeeze, with rising energy costs and still relatively high mortgage rates continue to strain household budgets. This suggests that while the interest rate hold may bring some stability, many households will still face significant financial pressures as we enter into the new year.
"For those with mortgages, the picture is mixed. Borrowers on variable-rate mortgages gain a reprieve from immediate payment increases, which could encourage spending and economic activity. However, those looking to remortgage or secure new mortgages may still face relatively high rates and stringent lending criteria. Lenders however are likely to remain competitive, which could lead to more favourable rates for borrowers over time.
"While the BoE's decision brings some stability and potential confidence boosts to the property market, it exists within a broader context of economic challenges. Households and borrowers must navigate a landscape of high living costs and complex mortgage market conditions. The direction of future monetary policy and its impact on various economic sectors will be critical in shaping the UK's economic trajectory in the coming months."
