The Bank of England has today confirmed it will hold the base interest rate at 3.75%, in line with expectations. Inflation remains above the Bank’s 2% target, rising to 3.4% in December, which has encouraged policymakers to take a cautious approach at the first Monetary Policy Committee meeting of the year.
Although rates have been left unchanged, there are increasing signs that cuts could follow in the coming months. Many analysts believe April could be the earliest opportunity for the next reduction, as the Bank balances easing economic growth against persistent inflation and wage pressures. For now, markets had priced in only a small chance of a cut at this meeting, making today’s decision a near certainty.
For the property market, this period of stability is welcome. Mortgage rates have already fallen to their lowest levels since 2022, improving affordability for buyers and those looking to remortgage. While most borrowers are on fixed rate deals and will not see an immediate change, those renewing or taking out new mortgages are benefiting from increased competition among lenders.
Savers, however, may continue to feel the impact, with many providers cutting rates since the start of the year. With inflation still above target, real returns on cash savings remain weak, which could encourage some buyers to reconsider property as a longer term investment.
At Drivers & Norris, we are closely monitoring how interest rates and lending conditions are shaping buyer and seller confidence. If you are considering buying, selling or remortgaging this year, our team is on hand to help you understand your options and plan your next move with confidence.
— Drivers & Norris
Source: Property Industry Eye