Housing Market Update: Positive News from the Bank of England!
26th September 2023
The Bank of England announced this week that due to an unexpected inflation decrease, they will keep the Bank Rate the same at 5.25%. This is a positive step towards lowering the Bank Rate following its projection from the start of the year with 14 consecutive increases in the last 6 months alone.
Update: “The prospect of lower mortgage rates boosts buyer confidence” – Zoopla Reports.
Estate Agents have reported a rise of 12% in people returning to the housing market following the stall on the Bank Rate!
Why did the bank rate go up in the first place?
After Covid-19, the strong demand for consumer goods meant a disruption in supply chains, soaring energy bills and fuel prices. As well as this, the need for raw materials and or labour meant that as a country, we needed more than we could produce or supply. This caused the rate of inflation to rise and with this, the bank rate needed to go up, so more money was allocated to the economy from areas such as loans and mortgages to counter-balance the rate of inflation.
What does this mean for me and purchasing a new home?
With the Bank of England staying the same at 5.25% this is a positive step toward maintaining and or lowering the rate. It shows that inflation is becoming more manageable, and it could result in seeing the mortgage rate and cost of living begin to creep down.
The mortgage rates are already starting to be competitive with some lenders offering 4.5% mortgage rates, which is great news if you are looking to move! Competitive lending makes for better deals for you, the consumer, but also for the economy.
Looking towards the end of 2023 and into 2024:
This is really positive news coming into the second half of 2023 – with competitive mortgage rates out there, the supply of new, energy-efficient homes at an all-time high, and the unexpected decrease of inflation is showing a glimpse of hope for the economy resembling some sort of manageable normal for consumers.